Based on a latest survey of municipal councils, UK councils are preparing to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK stated that 60% of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling playing fields and open spaces to support their budgets, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of authorities seeking to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and using financial reserves to weather growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent said its property management strategy included the sale of a shopping centre in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Wider Financial Strains
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to increase local levies next April to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” stated a council leader.
He added: “We face 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 extremely difficult.”
Countrywide Trends and Projections
Research of county councils this week further found local finances being stretched by the increasing figures of young people and adults needing special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (IMD) for English councils, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The data highlights the extent of difficulties confronting municipal officials across key cities in the coming year,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and need,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study revealed.
