According to a new survey of municipal councils, UK councils are planning to sell community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of councils are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of public land and land to support their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a significant number of councils attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in Kent said its asset disposal plan featured the sale of a retail complex in a local town and a social club in another town to raise £20m over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Broader Financial Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next spring to address the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “There are population challenges which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils this week further found local finances being strained by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (IMD) for UK local authorities, many participating urban areas were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, cities are much more prone 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 report added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey found.
