Based on a recent poll of local authorities, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK reported that six out of ten of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and open spaces to support their budgets, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of councils attempting to raise money from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and utilising savings to weather increasing financial challenges.”
Specific Cases of Planned Sales
Medway Council in Kent announced its property management strategy featured the disposal of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Local Levy Increases and Wider Fiscal Strains
The survey of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of councils will have to increase council taxes next spring to address the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will persist to add to 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 very challenging.”
National Patterns and Forecasts
A survey of regional authorities this week further found council budgets being stretched by the growing number of children and older individuals requiring Send support.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The figures highlights the scale of challenges facing municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the last year, the study found.
