Based on a new poll of municipal councils, UK councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK reported that six out of ten of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and land to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of councils attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on restructuring services and using financial reserves to weather increasing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in southeast England announced its asset disposal plan included the sale of a retail complex in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the strategy.
Council Tax Increases and Broader Financial Pressures
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of authorities will have to increase council taxes next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and financial savings,” said a council leader.
He added: “We face demographic pressures which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
A survey of regional authorities recently also found council budgets being stretched by the increasing figures of young people and adults needing special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most deprived in England.
- “Member cities like several major towns place in the top 30 nationally under the latest IMD measures,” said the report.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of councils have cut or compromised care services in the past 12 months, the survey found.
