Based on a latest survey of municipal councils, UK councils are preparing to offload community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and land to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of authorities seeking to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using savings to weather growing fiscal pressures.”
Specific Cases of Planned Sales
One local authority in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Broader Financial Pressures
The survey of local authorities in the coalition, which covers several urban centers, also found that more than 70% of authorities will need to raise local levies next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of regional authorities recently further found local finances being strained by the growing number of children and adults needing special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the study.
“Although only a single urban area is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the study found.
