According to a new poll of municipal councils, UK councils are preparing to offload social clubs, athletic facilities, 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 for major urban areas in the UK reported that six out of ten of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and open spaces to support their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Planned Sales
Medway Council in Kent said its property management strategy included the disposal of a shopping centre in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Increases and Broader Financial Pressures
This research of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of councils will have to increase local levies next spring to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead 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 adopting creative strategies but certain measures require time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils this week also found local finances being strained by the increasing figures of children and older individuals requiring Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Gaps
Based on the latest indices of deprivation (IMD) for UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of disadvantage and demand,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the study found.
