According to a new study of municipal councils, UK councils are planning to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in England stated that six out of ten of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling public land and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a high proportion of councils attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise restructuring services and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in southeast England said its asset disposal plan featured the disposal of a retail complex in a local town and a social club in another town to generate 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which includes several urban centers, further found that more than 70% of authorities will need to increase council taxes next April to cover the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Forecasts
A survey of county councils this week further found local finances being strained by the growing number of young people and older individuals needing special educational assistance.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (IMD) for English councils, many key cities members were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The data highlights the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of deprivation and need,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study found.
