According to a latest survey of municipal councils, UK councils are planning to offload community centers, athletic facilities, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK reported that 60% of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and open spaces to shore up their budgets, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of councils attempting to raise money from a quick sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in southeast England said its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Rises and Wider Financial 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 increase council taxes next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” stated a council leader.
He added: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of county councils this week also found local finances being stretched by the growing number of young people and adults requiring special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The figures highlights the scale 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 reflects and addresses the real levels of deprivation and need,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the survey revealed.
