According to a recent survey of local authorities, UK councils are preparing to offload community centers, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and open spaces to support their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a significant number of authorities attempting to generate funds from a fire sale of holdings marked “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and utilising savings to weather increasing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the sale of a retail complex in a local town and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Broader Fiscal Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase local levies next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils recently further found council budgets being strained by the increasing figures of children and adults needing Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have put off 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 Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in England.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that accounts for and responds to the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the last year, the study revealed.
