According to a new survey of municipal councils, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that 60% of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and land to support their budgets, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of councils seeking to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and using savings to manage growing financial challenges.”
Detailed Cases of Planned Disposals
Medway Council in Kent announced its property management strategy included the sale of a retail complex in a local town and a community venue in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Council Tax Rises and Broader Financial Pressures
This research of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of councils will need to raise council taxes next April to cover the growing cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Forecasts
Research of county councils recently also found council budgets being stretched by the growing number of children and older individuals requiring Send support.
The County Councils Network said that council deficits will hit £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 special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) for English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of England. The figures underscores the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that accounts for and responds to the actual extent of deprivation and need,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study revealed.
