Based on a recent study of municipal councils, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and open spaces to shore up their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of councils seeking to raise money from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and using savings to manage growing financial challenges.”
Detailed Cases of Planned Sales
Medway Council in southeast England said its property management strategy included the disposal of a shopping centre in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Strains
This research of councils in the key cities group, which covers several urban centers, further found that more than 70% of councils will have to increase council taxes next April to address the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals 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 creative strategies but certain measures require time to deliver both improved services and financial savings,” said Vince Maple.
He added: “There are population challenges which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of county councils recently also found local finances being strained by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of England. The data underscores the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis concluded.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that accounts for and responds to the actual extent of deprivation and demand,” said a council leader.
“Without this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised care services in the past 12 months, the study found.
