According to a recent poll of municipal councils, UK councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal 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 intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of public land and open spaces to support their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and using savings to weather increasing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in southeast England announced its asset disposal plan featured the sale of a retail complex in a local town and a social club in another town to generate £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Increases and Wider Fiscal Strains
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise council taxes next April to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said 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 temporary accommodation.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and financial savings,” stated Vince Maple.
He continued: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils recently further found local finances being strained by the increasing figures of children and older individuals requiring Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (IMD) for English councils, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“While only one key city is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The data highlights the scale of difficulties confronting municipal officials across key cities in the coming year,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of councils have reduced or weakened care services in the last year, the study found.
