Based on a new poll of municipal councils, UK councils are planning to sell community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and land to support their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Specific Cases of Planned Disposals
One local authority in southeast England said its asset disposal plan included the sale of a retail complex in a local town and a social club in another town to generate £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, further found that over seven in ten of councils will need to increase council taxes next April to address the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He continued: “We face population challenges which will persist to increase 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.”
Countrywide Trends and Projections
Research of regional authorities this week also found council budgets being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the Send system until next year after a policy document setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (IMD) covering UK local authorities, many participating urban areas were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The figures underscores the extent of difficulties confronting municipal officials across key cities 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 addresses the actual extent of disadvantage and demand,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study revealed.
