Based on a recent study of municipal councils, UK councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of public land and land to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group said that a significant number of authorities attempting to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and using financial reserves to manage increasing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in southeast England announced its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Wider Financial Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to raise local levies next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will persist to increase 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.”
Countrywide Trends and Projections
A survey of county councils recently further found local finances being strained by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those reforms has been postponed.
Deprivation and Financial Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“While only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of England. The data underscores the extent of challenges confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised care services in the last year, the study found.
