Based on a recent survey of local authorities, UK councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to shore up their finances, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of councils seeking to generate funds from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and utilising savings to manage increasing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in a local town and a social club in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Council Tax Rises and Broader Financial Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase council taxes next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to deliver both improved services and financial savings,” stated a council leader.
He added: “There are demographic pressures 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 2010-24, which is extremely difficult.”
National Patterns and Projections
A survey of regional authorities this week further found local finances being strained by the increasing figures of children and adults needing Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (IMD) covering English councils, several participating urban areas were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the scale of difficulties confronting local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised care services in the last year, the study found.
