According to a new poll of municipal councils, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and open spaces to shore up their budgets, but they contend they must proceed 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 assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Detailed Cases of Proposed Sales
Medway Council in Kent said its property management strategy included the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Increases and Wider Fiscal Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase council taxes next spring to address the growing cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “There are 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 extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils this week also found council budgets being strained by the increasing figures of children and older individuals needing special educational assistance.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Gaps
Based on the most recent deprivation measures (IMD) covering English councils, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the 2025 IMD measures,” noted the report.
“Although only one key city is among the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of England. The data underscores the extent of challenges facing local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of councils have reduced or weakened care services in the last year, the study found.
