According to a recent survey of municipal councils, UK councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of local authorities are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of public land and open spaces to support their budgets, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to raise money from a quick sale of holdings marked “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and utilising savings to manage growing financial challenges.”
Specific Examples of Planned Sales
One local authority in Kent said its asset disposal plan included the sale of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Financial Pressures
This research of councils in the coalition, which covers several urban centers, further found that more than 70% of councils will need to increase local levies next spring to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to achieve both improved services and financial savings,” said Vince Maple.
He added: “We face demographic pressures which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently also found local finances being strained by the growing number of children and older individuals needing Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they grapple to manage 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 Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members 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 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of the nation. The data highlights the extent of challenges facing municipal officials across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and demand,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the study revealed.
