According to a recent survey of municipal councils, UK councils are planning to offload community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of local authorities are planning to sell assets to meet the escalating 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 property disposals or declare themselves bankrupt.
The group said that a high proportion of councils attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and using savings to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in southeast England said its property management strategy featured the sale of a shopping centre in Rainham and a social club in another town to generate £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Council Tax Rises and Wider Fiscal Strains
This research of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of authorities will have to increase council taxes next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
The authority explained it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils this week also found local finances being strained by the increasing figures of children and adults requiring Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Financial Gaps
Based on the most recent indices of deprivation (IMD) covering English councils, several participating urban areas were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of difficulties facing local leaders across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the study found.
