Based on a new survey of municipal councils, UK councils are preparing to offload community centers, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of public land and land to shore up their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and using savings to manage increasing financial challenges.”
Specific Examples of Proposed Sales
One local authority in southeast England said its property management strategy featured the disposal of a retail complex in a local town and a social club in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these require time to achieve both better provisions and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Projections
A survey of county councils this week also found local finances being strained by the growing number of young people and adults requiring Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (IMD) for English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” said the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the extent of challenges confronting municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of deprivation and demand,” said a council leader.
“Without this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
