According to a new survey of municipal councils, UK councils are preparing to sell community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
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 majority (60%) of local leaders stated they would prioritise restructuring services and using financial reserves to manage growing fiscal pressures.”
Detailed Cases of Proposed Disposals
Medway Council in southeast England said its asset disposal plan included the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the plan.
Council Tax Rises and Wider Financial Pressures
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase local levies next April to address the growing cost of essential services, higher levels 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 youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these require time to deliver both improved services and financial savings,” stated a council leader.
He added: “We face demographic pressures which will continue 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 very challenging.”
Countrywide Trends and Projections
A survey of county councils recently also found local finances being stretched by the growing number of children and older individuals needing special educational assistance.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were among the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of England. The data highlights the scale of challenges facing municipal officials across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and need,” stated a council leader.
“Without this, local authorities will persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the study found.
