According to a new survey of local authorities, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Growing Financial Challenges 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 rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling public land and land to support their budgets, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of councils seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will additionally be sold under the strategy.
Local Levy Rises and Broader Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of councils will need to raise council taxes next April to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, 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 population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of regional authorities recently further found council budgets being strained by the growing number of children and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Government officials have put off planned reforms to the Send system until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the scale of difficulties facing municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the survey found.
