According to a recent poll of local authorities, UK councils are preparing to sell community centers, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in England reported that 60% of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling playing fields and land to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and using savings to manage growing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Wider Financial Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to raise local levies next April to cover the rising 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 sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “We face population challenges which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Projections
A survey of regional authorities this week further found local finances being stretched by the increasing figures of young people and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the extent of challenges facing local leaders across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and demand,” stated a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
