Based on a recent study of municipal councils, UK councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and utilising savings to weather increasing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan featured the sale of a shopping centre in Rainham and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy 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 council taxes next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these require time to achieve both improved services and financial savings,” said a council leader.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of regional authorities this week further found local finances being strained by the increasing figures of children and adults requiring special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a policy document outlining those changes has been postponed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (IMD) for UK local authorities, several participating urban areas were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The data underscores the scale of difficulties facing local leaders across key cities in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and demand,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
