According to a new poll of municipal councils, UK councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of local authorities are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and open spaces to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on restructuring services and using savings to manage increasing financial challenges.”
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 another town to raise £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the strategy.
Local Levy Rises and Broader Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of councils will need to raise local levies next spring to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases 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 deliver both improved services and financial savings,” said Vince Maple.
He added: “We face population challenges which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Projections
Research of county councils this week also found council budgets being stretched by the growing number of children and adults needing Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
According to the most recent indices of deprivation (IMD) covering English councils, several key cities members were among the most deprived in England.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” said the study.
“While only one key city is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The figures highlights the extent of challenges facing municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the real levels of disadvantage and demand,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey revealed.
