Based on a new study of municipal councils, UK councils are planning to sell social clubs, 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 major urban areas in England stated that 60% of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and open spaces to support their budgets, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of authorities seeking to generate funds from a quick sale of holdings marked “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and utilising savings to manage growing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in Kent said its property management strategy included the disposal of a retail complex in Rainham and a social club in another town to generate 20 million pounds 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 disposed of under the plan.
Council Tax Rises and Wider Fiscal Pressures
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to raise council taxes next April to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both improved services and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
A survey of county councils recently further found council budgets being strained by the increasing figures of young people and adults requiring special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of England. The data highlights the scale of difficulties confronting local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and need,” said a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have cut or compromised care services in the last year, the study found.
