Based on a new survey of municipal councils, UK councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK stated that 60% of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and land to shore up their budgets, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of councils seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and utilising savings to weather increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in southeast England said its property management strategy included the disposal of a shopping centre in Rainham and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Strains
This research of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of authorities will need to raise local levies next spring to address the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead with property disposals 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 taking innovative approaches but some of these take time to deliver both better provisions and financial savings,” said a council leader.
He added: “We face demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils recently also found council budgets being strained by the increasing figures of young people and older individuals needing special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (IMD) covering English councils, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers 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 one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of England. The data highlights the extent of difficulties confronting local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and need,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the study found.
