Based on a new survey of municipal councils, UK councils are preparing to offload community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing major urban areas in the UK stated that 60% of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of playing fields and land to support their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of authorities seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and using financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in southeast England said its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Fiscal Pressures
This research of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of authorities will need to increase council taxes next spring to address the growing cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He continued: “We face demographic pressures 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 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils recently further found local finances being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (IMD) covering English councils, several key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the study.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of difficulties facing municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the study revealed.
