Based on a new survey of local authorities, UK councils are planning to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and open spaces to support their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of authorities attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and utilising savings to manage growing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in southeast England said its property management strategy featured the sale of a shopping centre in a local town and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties 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 Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said 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 adopting creative strategies but certain measures require time to achieve both better provisions and cost efficiency,” said Vince Maple.
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 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
A survey of regional authorities this week further found council budgets being strained by the growing number of children and older individuals needing Send support.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of the nation. The data highlights the extent of difficulties facing local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and need,” stated a council leader.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the study found.
