Based on a recent poll of municipal councils, UK councils are preparing to offload community centers, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England stated that six out of ten of councils are planning to dispose of properties 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 open spaces to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of councils seeking to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and using savings to weather increasing fiscal pressures.”
Detailed Examples of Planned Sales
Medway Council in Kent said its property management strategy included the disposal of a retail complex in Rainham and a social club in another town to raise 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Council Tax Increases and Wider Fiscal Strains
The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of councils will have to increase council taxes next April to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both improved services and financial savings,” said a council leader.
He added: “There are demographic pressures which will persist 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.”
National Patterns and Forecasts
A survey of county councils recently further found council budgets being strained by the growing number of children and older individuals requiring Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” said the report.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data underscores the extent of difficulties facing local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the survey revealed.
