Based on a latest study of municipal councils, UK councils are preparing to offload community centers, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and using financial reserves to weather growing financial challenges.”
Detailed Cases of Planned Sales
One local authority in Kent said its asset disposal plan included the disposal of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Rises and Wider Financial Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise local levies next April to cover the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to achieve both improved services and financial savings,” said a council leader.
He added: “There are population challenges which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of regional authorities recently also found council budgets being strained by the growing number of children and adults needing Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data highlights the scale of challenges facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised care services in the last year, the study found.
