According to a latest survey of municipal councils, UK councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated 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 shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of councils seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in southeast England announced its property management strategy included the disposal of a shopping centre in a local town and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Increases and Broader Fiscal Strains
The survey of local authorities in the key cities group, which includes several urban centers, further found that over seven in ten of councils will have to increase local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these take time to achieve both improved services and cost efficiency,” said a council leader.
He added: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils recently also found council budgets being strained by the growing number of children and adults needing Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several key cities members were among the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and need,” said a council leader.
“Without this, councils will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
