According to a recent poll of municipal councils, UK councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and land to support their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of councils attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using savings to weather growing fiscal pressures.”
Detailed Cases of Planned Disposals
Medway Council in Kent said its asset disposal plan included the sale of a retail complex in a local town and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the plan.
Council Tax Increases and Wider Financial Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise council taxes next April to address the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of regional authorities this week also found local finances being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
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.
Disadvantage and Funding Gaps
According to the latest deprivation measures (IMD) for UK local authorities, many key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” said the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the extent of challenges facing local leaders across key cities in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and need,” said a council leader.
“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 past 12 months, the survey found.
