🔗 Share this article

Based on a new study of municipal councils, UK councils are preparing to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.

Growing Financial Pressures Prompt Asset Sales

A coalition of councils representing second-tier cities in the UK stated that six out of ten of local authorities are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.

Councils have previously come under fire for disposing of playing fields and open spaces to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.

The group said that a significant number of authorities attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and using savings to manage increasing fiscal pressures.”

Specific Cases of Planned Disposals

Medway Council in southeast England announced its asset disposal plan featured the sale of a retail complex in Rainham and a social club 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 Medway council, will also be disposed of under the plan.

Council Tax Increases and Broader Fiscal Pressures

The survey of local authorities in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will have to raise council taxes next spring to address the rising cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.

Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.

“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” said Vince Maple.

He continued: “There are population challenges which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”

Countrywide Trends and Projections

A survey of regional authorities this week further found local finances being stretched by the increasing figures of young people and older individuals requiring Send support.

A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.

Government officials have put off planned reforms to the special educational needs framework until next year after a white paper outlining those changes has been postponed.

Deprivation and Funding Shortfalls

Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most deprived in England.

• “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.

“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.

“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of deprivation and demand,” said Michael Mordey.

“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”

A fifth of local authorities have cut or compromised care services in the past 12 months, the study revealed.