Based on a latest survey of local authorities, UK councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of local authorities are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and open spaces to support their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of authorities seeking to generate funds from a quick 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 manage growing financial challenges.”
Specific Examples of Planned Sales
One local authority in southeast England announced its property management strategy included the disposal of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the strategy.
Local Levy Rises and Wider Financial Pressures
This research of councils in the key cities group, which covers several urban centers, further found that over seven in ten of councils will need to increase council taxes next spring to cover the rising cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to deliver both improved services and financial savings,” stated a council leader.
He continued: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils recently further found local finances being stretched by the growing number of children and adults needing Send support.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have put off planned reforms to the Send system until next year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (IMD) for UK local authorities, several key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the study.
“While only one key city is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have cut or compromised care services in the last year, the study revealed.
