According to a latest study of municipal councils, UK councils are planning to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of local authorities are intending 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 shore up their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of authorities attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and using financial reserves to weather growing fiscal pressures.”
Specific Examples of Proposed Disposals
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 Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Strains
The survey of local authorities in the coalition, which covers several urban centers, also found that over seven in ten of councils will need to raise council taxes next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both improved services and financial savings,” said Vince Maple.
He added: “There are demographic pressures 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 Forecasts
Research of county councils recently also found council budgets being strained by the growing number of young people and adults needing Send support.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest deprivation indices,” said the report.
“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The data underscores the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study revealed.
