According to a new poll of municipal councils, UK councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of local authorities are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling playing fields and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and using savings to manage increasing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in southeast England announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Rises and Broader Fiscal Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise council taxes next April to address the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales 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 creative strategies but some of these take time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
A survey of county councils this week further found council budgets being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
