According to a new poll of municipal councils, UK councils are preparing to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and using savings to manage increasing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England said its property management strategy featured the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the plan.
Council Tax 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 have to raise council taxes next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and financial savings,” said a council leader.
He added: “There are population challenges which will continue to add to the pressures 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.”
National Trends and Forecasts
Research of county councils recently further found council budgets being strained by the increasing figures of children and older individuals requiring special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (IMD) for English councils, many participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of challenges confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“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 need,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the survey revealed.
