Based on a recent study of municipal councils, UK councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and land to support their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of councils seeking to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and utilising financial reserves to manage increasing financial challenges.”
Detailed Examples of Planned Sales
One local authority in southeast England announced its property management strategy included the disposal of a shopping centre in a local town and a social club in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise council taxes next April to address the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and financial savings,” stated a council leader.
He added: “There are population challenges which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of county councils this week further found council budgets being strained by the growing number of young people and adults requiring special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were among the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data underscores the scale of difficulties confronting local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the last year, the study found.
