According to a new poll of municipal councils, UK councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in the UK reported that 60% of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of public land and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to weather growing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in southeast England said its property management strategy included the sale of a retail complex in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Rises and Wider Financial Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase council taxes next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of regional authorities this week also found council budgets being stretched by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a white paper setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns rank in the top 30 across the country under the latest deprivation indices,” said the report.
“While only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties confronting local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and demand,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
