According to a recent poll of local authorities, UK councils are preparing to sell community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling public land and land to shore up their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of councils attempting to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Cases of Planned Sales
Medway Council in Kent said its property management strategy featured the sale of a retail complex in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Local Levy Rises and Wider Fiscal Pressures
The survey of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of authorities will have to raise local levies next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases 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 require time to deliver both improved services and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently also found council budgets being strained by the increasing figures of children and adults needing special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the Send system until next year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The data highlights the extent of difficulties confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
