According to a recent survey of municipal councils, UK councils are planning to offload community centers, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for major urban areas in England reported that six out of ten of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and land to support their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using financial reserves to weather growing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in Kent announced its property management strategy included the disposal of a shopping centre in a local town and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.
Local Levy Increases and Wider Fiscal Strains
This research of councils in the coalition, which includes several urban centers, also found that over seven in ten of authorities will need to increase council taxes next April to address the growing cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these require time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “There are 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 very challenging.”
National Patterns and Forecasts
Research of county councils recently also found council budgets being stretched by the growing number of children and adults needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (IMD) for UK local authorities, several key cities members were among the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and demand,” stated a council leader.
“Without this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
