According to a recent study of local authorities, UK councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and land to support their budgets, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
This coalition noted that a high proportion of authorities seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England announced its property management strategy featured the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Increases and Broader Fiscal Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase council taxes next April to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “There are population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Projections
A survey of county councils recently further found council budgets being strained by the growing number of children and adults needing special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the extent of challenges confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey found.
