Based on a recent study of municipal councils, UK councils are preparing to sell community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing major urban areas in the UK stated that six out of ten of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and open spaces to support their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a high proportion of authorities seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and utilising savings to weather growing fiscal pressures.”
Detailed Cases of Proposed Disposals
Medway Council in Kent announced its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Increases and Wider Fiscal Pressures
This research of councils in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will have to raise local levies next April to address the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both better provisions and financial savings,” said a council leader.
He added: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils recently also found local finances being stretched by the growing number of young people and adults requiring Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) covering English councils, many key cities members were among the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of challenges confronting local leaders across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Without this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the study revealed.
