According to a new survey of municipal councils, UK councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Pressures Prompt 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 cover the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and land to support their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to generate funds from a fire sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to manage increasing fiscal pressures.”
Detailed Cases of Planned Sales
Medway Council in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
The survey of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of authorities will have to raise local levies next April to address the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will continue 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
Research of county councils this week also found council budgets being stretched by the growing number of children and adults needing special educational assistance.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (IMD) covering English councils, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest deprivation indices,” noted the report.
“While only one key city is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties confronting local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the survey found.
