Based on a latest study of municipal councils, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of local authorities are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and land to support their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
This coalition noted that a significant number of authorities attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and utilising savings to weather increasing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in southeast England said its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in another town to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next spring to address the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of regional authorities recently also found council budgets being stretched by the increasing figures of children and adults requiring 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 grapple to cope with rising needs.
Government officials have delayed planned reforms to the Send system until next year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (IMD) covering UK local authorities, many key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the study.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of England. The data underscores the scale of challenges facing local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the last year, the study found.
