According to a new survey of municipal councils, UK councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and land to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a significant number of authorities seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and utilising financial reserves to manage increasing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in southeast England announced its property management strategy included the sale of a shopping centre in Rainham and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Increases and Wider Fiscal Strains
This research of local authorities in the coalition, which covers several urban centers, also found that over seven in ten of authorities will need to raise council taxes next spring to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding 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, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures require time to achieve both better provisions and financial savings,” stated a council leader.
He added: “There are population challenges which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently also found council budgets being stretched by the increasing figures of children and older individuals needing special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most deprived in England.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties facing local leaders across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have cut or compromised care services in the last year, the study found.
