According to a new poll of local authorities, UK councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of councils seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and using savings to weather increasing fiscal pressures.”
Detailed Cases of Proposed Sales
Medway Council in southeast England said its property management strategy included the sale of a retail complex in a local town and a social club in another town to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Increases and Wider Financial Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of regional authorities this week further found local finances being strained by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and demand,” said a council leader.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the survey found.
