Based on a new poll of municipal councils, UK councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of councils are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and open spaces to support their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of authorities seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and utilising financial reserves to weather growing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in Kent said its property management strategy included the disposal of a shopping centre in Rainham and a community venue in another town to generate £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Broader Financial Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “There are demographic pressures which will persist to increase 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 extremely difficult.”
National Trends and Projections
A survey of regional authorities recently also found local finances being stretched by the increasing figures of children and older individuals needing Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have put off planned reforms to the Send system until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in 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,” noted the study.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties confronting local leaders across major urban centers in the coming year,” the report added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage and demand,” stated a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study revealed.
