According to a recent poll of municipal councils, UK councils are planning to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England reported that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling public land and land to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would focus on restructuring services and using savings to manage growing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in southeast England announced its property management strategy included the sale of a retail complex in Rainham and a social club in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Council Tax Rises and Broader Fiscal Pressures
This research of councils in the coalition, which includes several urban centers, also found that more than 70% of authorities will have to raise local levies next spring to cover the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with asset sales 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 innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of county councils this week also found local finances being strained by the growing number of young people and adults needing special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (IMD) covering UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The figures highlights the extent of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey found.
