Based on a new survey of municipal councils, UK councils are planning to offload community centers, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of local authorities are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and open spaces to support their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of councils attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and using savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in Kent said its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Local Levy Increases and Wider Fiscal Strains
This research of local authorities in the coalition, which covers several urban centers, further found that more than 70% of councils will need to increase local levies next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils this week further found council budgets being strained by the increasing figures of children and older individuals needing Send support.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the 2025 IMD measures,” said the report.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of challenges facing municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and addresses the actual extent 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 reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study found.
