Based on a recent survey of local authorities, UK councils are planning to sell community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in the UK stated that six out of ten of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism 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 high proportion of authorities seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and using financial reserves to weather growing fiscal pressures.”
Detailed Cases of Proposed Disposals
Medway Council in Kent announced its asset disposal plan included the sale of a shopping centre in Rainham and a social club in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Pressures
The survey of councils in the coalition, which includes several urban centers, also found that more than 70% of authorities will need to raise council taxes next spring to address the growing cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority said it will proceed with asset sales 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 taking creative strategies but some of these take time to deliver both improved services and financial savings,” said Vince Maple.
He added: “We face demographic pressures 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.”
National Trends and Projections
A survey of county councils recently further found council budgets being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (IMD) for UK local authorities, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is among the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties confronting municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and demand,” said a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the survey found.
