Based on a new study of municipal councils, UK councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of playing fields and land to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a significant number of authorities attempting to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its property management strategy included the disposal of a retail complex in Rainham and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Broader Financial Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase local levies next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to achieve both improved services and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of regional authorities recently further found local finances being stretched by the increasing figures of young people and adults requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were among 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 one key city 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 highlights the extent of challenges facing municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and need,” said a council leader.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
