According to a new poll of local authorities, UK councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in the UK reported that 60% of local authorities are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and open spaces to support their budgets, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a significant number of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and using savings to weather growing financial challenges.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Wider Fiscal Pressures
This research of local authorities in the coalition, which includes several urban centers, also found that over seven in ten of authorities will have to raise local levies next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these require time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Projections
Research of county councils this week also found council budgets being stretched by the growing number of young people 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 struggle to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (IMD) covering English councils, several key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of difficulties confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised care services in the last year, the study found.
