According to a new survey of municipal councils, UK councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling public land and open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of authorities seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and using financial reserves to weather growing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent said its asset disposal plan included the sale of a shopping centre in a local town and a community venue in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Rises and Broader Financial Strains
The survey of local authorities in the coalition, which includes several urban centers, also found that over seven in ten of councils will need to increase council taxes next spring to cover the rising cost of essential services, increased rates of homelessness, and a persistent housing shortage.
The authority said it will press ahead with asset sales after steep rises 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 certain measures require time to deliver both better provisions and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
Research of regional authorities this week also found local finances being strained by the growing number of young people and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (IMD) covering English councils, many key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The data underscores the extent of challenges facing municipal officials across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the last year, the study revealed.
