According to a recent survey of municipal councils, UK councils are planning to offload community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and land to support their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of authorities seeking to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”
Specific Examples 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 community venue in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Strains
The survey of councils in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will have to raise council taxes next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but certain measures take time to deliver both better provisions and financial savings,” said a council leader.
He continued: “We face demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
Research of county councils recently also found council budgets being strained by the increasing figures of young people and older individuals needing special educational assistance.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those changes has been postponed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (IMD) covering UK local authorities, several participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of difficulties confronting municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and demand,” stated a council leader.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the study found.
