According to a new study of municipal councils, UK councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of local authorities are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and open spaces to support their budgets, 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 quick sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and utilising savings to weather growing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in southeast England announced its asset disposal plan featured the disposal of a retail complex in a local town and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Pressures
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase local levies next April to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies 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 continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities this week also found council budgets being strained by the growing number of young people and adults needing special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data underscores the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey found.
