Based on a recent poll of municipal councils, UK councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and open spaces to support their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a significant number of authorities attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and using savings to weather growing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in Kent said its property management strategy included the sale of a shopping centre in Rainham and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Rises and Broader Fiscal Strains
This research of councils in the key cities group, which covers several urban centers, also found that more than 70% of councils will need to raise local levies next April to cover the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these take time to achieve both better provisions and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of regional authorities this week further found council budgets being stretched by the increasing figures of young people and adults requiring Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (IMD) covering UK local authorities, many key cities members were among the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” said the report.
“While only a single urban area is in the top 10 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 facing municipal officials across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the survey revealed.
