According to a latest poll of municipal councils, UK councils are preparing to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and open spaces to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and utilising financial reserves to weather increasing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in southeast England announced its asset disposal plan included the sale of a retail complex in Rainham and a social club in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Increases and Wider Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, further found that more than 70% of councils will need to increase council taxes next April to address the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases 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 some of these require time to deliver both improved services and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
A survey of county councils recently further found local finances being stretched by the increasing figures of young people and adults requiring Send support.
A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (IMD) covering UK local authorities, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the extent of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the survey revealed.
