According to a new survey of municipal councils, UK councils are preparing to offload community centers, sports centres, and retail spaces as they rely on a rapid disposal of properties to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in England reported that 60% of councils are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling playing fields and open spaces to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in Kent announced its property management strategy included the sale of a retail complex in Rainham and a community venue in another town to generate £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the strategy.
Council Tax Rises and Broader Financial Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase local levies next spring to cover the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both better provisions and financial savings,” stated a council leader.
He added: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of regional authorities recently also found local finances being strained by the increasing figures of children and older individuals needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those changes has been postponed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” said the report.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of the nation. The data underscores the extent of difficulties confronting local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and need,” said a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of councils have cut or compromised care services in the past 12 months, the study revealed.
