According to a recent poll of local authorities, UK councils are planning to sell community centers, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and open spaces to support their finances, but they argue 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 raise money from a quick sale of assets represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in Kent said its property management strategy included the disposal 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 commercial properties owned in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Financial Pressures
This research of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of councils will need to raise local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council said 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 creative strategies but certain measures require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He continued: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of regional authorities recently further found council budgets being strained by the increasing figures of children and adults needing Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 nationally under the latest deprivation indices,” noted the report.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of challenges facing municipal officials across key cities in the next twelve months,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of disadvantage and need,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey found.
