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According to a recent survey of municipal councils, UK councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.

Increasing Fiscal Challenges Prompt Asset Sales

The Key Cities Group representing major urban areas in England reported that six out of ten of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.

Councils have in the past come under fire for disposing of playing fields and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from property disposals or face insolvency.

This coalition said that a high proportion of councils seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and utilising savings to weather increasing fiscal pressures.”

Specific Examples of Proposed Sales

Medway Council in southeast England announced its property management strategy included the sale of a shopping centre in Rainham and a community venue in Rochester to raise £20m over five years.

• Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the strategy.

Local Levy Rises and Wider Financial Pressures

The survey 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 spring to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.

Medway council said it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.

“We are taking innovative approaches but some of these require time to achieve both improved services and financial savings,” said a council leader.

He added: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”

Countrywide Patterns and Projections

A survey of regional authorities this week further found council budgets being stretched by the growing number of children and adults needing 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 grapple to cope with increased demand.

Ministers have put off scheduled changes to the Send system until the coming year after a policy document setting out those reforms has been postponed.

Disadvantage and Financial Shortfalls

According to the most recent indices of deprivation (IMD) for UK local authorities, several key cities members were among the most disadvantaged in England.

• “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” said the report.

“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the report added.

“Local government leaders have been clear about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of deprivation and need,” stated 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.”

One in five of councils have cut or compromised social care provision in the last year, the study found.