Based on a new survey of municipal councils, UK councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils representing major urban areas in the UK stated that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of playing fields and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to generate funds from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and using savings to manage increasing fiscal pressures.”
Specific Cases of Proposed Disposals
Medway Council in Kent announced its property management strategy included the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Rises and Wider Fiscal Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase local levies next spring to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Patterns and Forecasts
A survey of county councils this week also found local finances being stretched by the increasing figures of young people and older individuals needing special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the extent of challenges facing municipal officials across key cities in the next twelve months,” the report added.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and demand,” stated a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey found.
