Based on a latest study of municipal councils, UK councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of playing fields and land to support their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of councils attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in Kent said its asset disposal plan included the sale of a shopping centre in a local town and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Rises and Broader Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise council taxes next spring to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “There are population challenges which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities this week also found council budgets being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have put off planned reforms to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were among the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” said the report.
“Although only one key city is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The figures underscores the extent of difficulties confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that reflects and addresses the real levels of deprivation and demand,” said a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised care services in the past 12 months, the study revealed.
