Based on a latest survey of municipal councils, UK councils are preparing to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of councils are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism 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 declare themselves bankrupt.
The group said that a high proportion of councils seeking to raise money from a quick 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 financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in southeast England announced its property management strategy featured the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Increases and Broader Financial Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise council taxes next April to cover the rising cost of core provisions, higher levels 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 take time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “There are population challenges which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Projections
A survey of regional authorities recently also found local finances being strained by the increasing figures of children and older individuals needing Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
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 Funding Shortfalls
Based on the latest indices of deprivation (IMD) for English councils, many key cities members were among the most disadvantaged in England.
- “Participating urban centers 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.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of challenges facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and responds to the actual extent 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 cut, to the detriment of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the survey found.