Based on a recent poll of local authorities, UK councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of playing fields and open spaces to support their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a significant number of councils seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising savings to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its property management strategy included the sale of a shopping centre in Rainham and a community venue in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Fiscal Pressures
The survey of local authorities in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will need to raise local levies next spring to address the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
A survey of regional authorities recently also found council budgets being strained by the increasing figures of young people and adults needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper outlining those changes has been postponed.
Deprivation and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the report.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of England. The data underscores the extent of challenges facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the study found.
