According to a recent survey of municipal councils, UK councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of playing fields and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of authorities attempting to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”
Detailed Cases of Planned Disposals
Medway Council in southeast England said its property management strategy included the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.
Council Tax Increases and Broader Financial Strains
The survey of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of authorities will have to raise council taxes next spring 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 temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and financial savings,” said a council leader.
He added: “There are population challenges which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities recently also found local finances being strained by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The data highlights the extent of challenges confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and demand,” said a council leader.
“Without this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the study found.
