Based on a new survey of municipal councils, UK councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and land to support their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group said that a high proportion of authorities seeking to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (60%) of local leaders stated they would prioritise service redesigns and utilising financial reserves to weather increasing fiscal pressures.”
Specific Cases of Planned Sales
Medway Council in Kent announced its asset disposal plan featured the sale of a shopping centre in Rainham and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Increases and Wider Financial Pressures
This research of local authorities in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will have to raise council taxes next April to address the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
Medway council explained it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils recently further found council budgets being stretched by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (IMD) covering UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the extent of challenges facing municipal officials across key cities in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study revealed.
