According to a new survey of municipal councils, UK councils are planning to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of councils are planning to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of playing fields and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and utilising financial reserves to weather increasing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in Kent said its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Rises and Wider Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise council taxes next spring to address the growing cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
Medway council said it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these take time to achieve both improved services and financial savings,” stated a council leader.
He added: “There are demographic pressures which will persist to add to the strains we have. As a local government body, we had a drastic reduction 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 local finances being strained by the increasing figures of young people and adults needing special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the survey revealed.
