Based on a recent poll of municipal councils, UK councils are preparing to sell community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for major urban areas in England stated that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and land to support their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a significant number of councils seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and using savings to manage increasing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in another town to generate £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Rises and Broader Financial Pressures
The survey of councils in the key cities group, which covers several urban centers, further found that over seven in ten of councils will need to increase local levies next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures take time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils recently also found local finances being strained by the increasing figures of children and older individuals requiring Send support.
A network of councils said 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 planned reforms to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most deprived in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of challenges confronting local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study found.
