Based on a recent survey of municipal councils, UK councils are preparing to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and open spaces to support their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would focus on service redesigns and utilising savings to manage growing financial challenges.”
Specific Examples of Planned Sales
Medway Council in Kent announced its property management strategy included the sale of a retail complex in Rainham and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Rises and Broader Financial Pressures
This research of councils in the coalition, which covers several urban centers, also found that over seven in ten of authorities will need to increase local levies next April to address the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both improved services and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
Research of county councils recently also found local finances being stretched by the growing number of young people and adults requiring Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (IMD) for UK local authorities, several key cities members were among the most deprived in England.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of challenges facing local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the survey found.
