Based on a recent survey of municipal councils, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to support their finances, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of authorities seeking to raise money from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise restructuring services and utilising savings to weather increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in southeast England announced its property management strategy included the disposal 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 owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Broader Fiscal Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise local levies next April to address the rising cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils this week also found council budgets being stretched by the increasing figures of young people and adults requiring special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off planned reforms to the Send system until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (IMD) covering English councils, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of England. The figures highlights the extent of difficulties facing municipal officials across key cities in the next twelve months,” the report concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions 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 care services in the last year, the study found.
