According to a new survey of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that 60% of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and land to support their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of councils seeking to raise money from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and utilising savings to weather growing financial challenges.”
Specific Examples of Proposed Disposals
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 raise 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the strategy.
Council Tax Increases and Wider Financial Pressures
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise council taxes next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both improved services and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
Research of county councils recently also found local finances being strained by the growing number of young people and adults needing special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most disadvantaged in England.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the extent of difficulties facing local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study revealed.
