Based on a latest poll of municipal councils, UK councils are preparing to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and open spaces to support their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to generate funds from a quick sale of assets represented “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and using financial reserves to weather growing financial challenges.”
Specific Cases of Proposed Disposals
One local authority in Kent said its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in another town 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 additionally be sold under the plan.
Council Tax Rises and Broader Fiscal Strains
This research of councils in the key cities group, which includes several urban centers, also found that more than 70% of councils will have to raise council taxes next April to address the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both improved services and financial savings,” said a council leader.
He continued: “We face population challenges which will continue to add to the pressures 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 Patterns and Forecasts
Research of county councils this week also found local finances being strained by the growing number of young people and adults needing Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (IMD) covering English councils, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” noted the study.
“While only one key city is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the scale of challenges facing municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the last year, the study revealed.
