Based on a new poll of local authorities, UK councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and open spaces to support their finances, but they contend they must continue to raise vital cash from property disposals or face insolvency.
The group said that a significant number of authorities attempting to raise money from a fire sale of holdings represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and utilising savings to weather increasing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in Kent announced its property management strategy included the disposal of a shopping centre in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Council Tax Increases and Wider Fiscal Pressures
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of councils will need to increase council taxes next spring to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will persist to increase 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 Trends and Projections
Research of county councils recently further found local finances being strained by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” said the report.
“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 worst-off 20% of England. The figures underscores the extent of challenges confronting 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 equitable and lasting financial structure that reflects and addresses the actual extent of disadvantage and need,” said a council leader.
“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey revealed.
