Based on a new poll of local authorities, UK councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in the UK stated that six out of ten of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling public land and land to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition noted that a high proportion of councils attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and utilising financial reserves to manage growing financial challenges.”
Detailed Cases of Proposed Sales
Medway Council in Kent announced its property management strategy included the disposal of a shopping centre in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks held in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Rises and Broader Financial Strains
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise local levies next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these require time to deliver both improved services and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
Research of regional authorities recently also found local finances being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most deprived in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” said the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” said a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the last year, the study revealed.
