Based on a new study of municipal councils, UK councils are preparing to offload community centers, sports centres, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they argue they must continue to raise vital cash 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 holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in Kent announced its asset disposal plan included the sale of a shopping centre in a local town and a community venue in another town to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all generate rent for Medway council, will also be sold under the strategy.
Local Levy Rises and Wider Fiscal Strains
The survey of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will need to increase council taxes next spring to cover the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “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 Forecasts
Research of county councils this week also found local finances being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a white paper setting out those changes has been postponed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties facing local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study revealed.
