According to a new survey of municipal councils, UK councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in England stated that 60% 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 playing fields and open spaces to support their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on service redesigns and using financial reserves to manage growing financial challenges.”
Detailed Cases of Proposed Sales
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Broader Fiscal Pressures
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise council taxes next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will continue 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.”
Countrywide Trends and Projections
Research of county councils recently also found council budgets being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network projected that local shortfalls 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 the coming year after a policy document setting out those changes has been postponed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (IMD) for English councils, several participating urban areas were included in the most deprived in the country.
- “Member cities like several major towns place in the top 30 nationally under the latest deprivation indices,” said the report.
“While only one key city is among the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The figures highlights the extent of challenges confronting municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey revealed.
