According to a latest poll of municipal councils, UK councils are planning to sell community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of councils are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of playing fields and open spaces to support their finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and utilising financial reserves to weather increasing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent announced its property management strategy featured the sale of a retail complex in Rainham and a community venue in Rochester to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Increases and Wider Financial Pressures
This research of councils in the key cities group, which covers several urban centers, further found that more than 70% of councils will need to increase local levies next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both improved services and cost efficiency,” stated 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 revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of county councils this week also found council budgets being stretched by the increasing figures of children and adults requiring Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Gaps
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 the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of challenges confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study found.
