According to a recent study of municipal councils, UK councils are planning to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK reported that 60% of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of authorities attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and using financial reserves to weather increasing financial challenges.”
Specific Cases of Proposed Disposals
One local authority in Kent said its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to raise £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Council Tax Increases and Broader Financial Strains
The survey of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of authorities will need to raise local levies next April to address the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils recently further found local finances being stretched by the growing number of children and older individuals requiring special educational assistance.
A network of councils said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Government officials have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (IMD) covering English councils, several participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the report.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the extent of challenges confronting local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and need,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised care services in the last year, the study revealed.
