Based on a new poll of local authorities, UK councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of playing fields and open spaces to support their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to manage growing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent announced its property management strategy included the sale of a shopping centre in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of councils will have to raise council taxes next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Projections
A survey of county councils recently further found local finances being strained by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Financial Gaps
According to the most recent deprivation measures (IMD) covering UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of challenges facing local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened care services in the last year, the survey revealed.
