Based on a new study of municipal councils, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and land to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils seeking to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and using savings to weather growing financial challenges.”
Detailed Cases 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 social club in Rochester to generate £20m over five years.
- A local golf course and business parks held in two English counties, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Increases and Broader Financial Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to raise local levies next spring to address the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and financial savings,” stated a council leader.
He added: “We face population challenges which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of county councils recently further found council budgets being stretched by the increasing figures of young people and adults needing Send support.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The figures underscores the scale of difficulties confronting municipal officials across key cities in the coming year,” 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 real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study found.
