According to a latest poll of municipal councils, UK councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to support their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using savings to weather growing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in Kent announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be sold under the strategy.
Council Tax Increases and Wider Fiscal Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase local levies next spring to address the rising cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead 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 certain measures take time to deliver both improved services and financial savings,” stated a council leader.
He added: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns 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 special educational assistance.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The figures underscores the scale of difficulties facing local leaders across key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the study revealed.
