According to a new poll of municipal councils, UK councils are planning to offload community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that six out of ten of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and land to support their finances, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Cases of Planned Disposals
Medway Council in southeast England said its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Local Levy Increases and Wider Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of councils will need to increase local levies next April to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with property disposals 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 innovative approaches but some of these require time to achieve both improved services and financial savings,” said Vince Maple.
He added: “There are demographic pressures which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of regional authorities this week also found local finances being strained by the increasing figures of children and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 nationally under the latest deprivation indices,” noted the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of England. The data highlights the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Without 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.”
A fifth of councils have reduced or weakened care services in the past 12 months, the survey revealed.
