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According to a latest survey of municipal councils, UK councils are preparing to offload community centers, athletic facilities, and retail spaces as they rely on a fire sale of properties to balance the books.

Growing Fiscal Challenges Prompt Asset Sales

A coalition of councils representing major urban areas in the UK stated that 60% of councils are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.

Local governments have previously faced criticism for selling playing fields and land to shore up their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.

This coalition said that a high proportion of authorities attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using financial reserves to manage increasing financial challenges.”

Detailed Examples of Proposed Disposals

Medway Council in southeast England said its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in another town to raise £20m over five years.

• A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the plan.

Council Tax Increases and Wider Fiscal Strains

The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise council taxes next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.

The authority said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.

“We are adopting innovative approaches but some of these require time to deliver both improved services and financial savings,” said Vince Maple.

He added: “There are demographic pressures which will continue to add to 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 very challenging.”

Countrywide Trends and Projections

A survey of county councils recently further found council budgets being stretched by the growing number of young people and older individuals needing special educational assistance.

A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.

Government officials have delayed scheduled changes to the Send system until next year after a policy document setting out those changes has been postponed.

Disadvantage and Financial Shortfalls

According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas 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 deprivation indices,” noted the study.

“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the extent of difficulties confronting municipal officials across key cities in the next twelve months,” the analysis added.

“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of deprivation and need,” said Michael Mordey.

“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”

A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.