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Based on a new poll of municipal councils, UK councils are planning to sell community centers, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.

Growing Fiscal Challenges Prompt Asset Sales

A coalition of councils representing second-tier cities in the UK reported that 60% of councils are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.

Councils have in the past come under fire for disposing of public land and open spaces to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.

The group noted that a high proportion of authorities attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise restructuring services and using savings to weather increasing fiscal pressures.”

Detailed Cases of Proposed Disposals

Medway Council in Kent announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in another town to raise £20m over five years.

• Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will also be sold under the plan.

Council Tax Rises and Broader Fiscal Strains

This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise council taxes next April to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.

The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.

“We are taking innovative approaches but certain measures take time to achieve both improved services and financial savings,” stated Vince Maple.

He added: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”

National Patterns and Forecasts

A survey of regional authorities this week also found local finances being strained by the growing number of young people and adults needing Send support.

The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.

Ministers have put off scheduled changes to the Send system until next year after a policy document outlining those reforms was recently delayed.

Disadvantage and Funding Shortfalls

Based on the latest deprivation measures (IMD) covering English councils, several key cities members were included in the most deprived in the country.

• “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the report.

“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of challenges confronting municipal officials across key cities in the coming year,” the analysis concluded.

“Council officials have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and need,” stated Michael Mordey.

“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”

A fifth of councils have reduced or weakened care services in the past 12 months, the study found.