According to a recent poll of local authorities, UK councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling public land and land to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of authorities attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and utilising financial reserves to weather increasing financial challenges.”
Specific Examples of Proposed 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 social club in Rochester to raise £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Rises and Broader Fiscal Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase local levies next April to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils recently also found local finances being stretched by the growing number of children and older individuals needing special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the extent of challenges confronting local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
