According to a latest survey of municipal councils, UK councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and open spaces to support their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils seeking to raise money from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in Kent said its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in another town to generate 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will also be sold under the plan.
Council Tax Increases and Wider Fiscal Strains
The survey of local authorities in the coalition, which covers 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 core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to deliver both improved services and financial savings,” said a council leader.
He added: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
Research of county councils this week further found council budgets being stretched by the increasing figures of children and older individuals needing Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties facing municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and demand,” said a council leader.
“Without this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
