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

Growing Fiscal Pressures Drive Asset Sales

A coalition of councils representing second-tier cities in England stated that six out of ten of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.

Councils have previously come under fire for selling public land and land to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.

The group said that a high proportion of councils attempting to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and utilising financial reserves to manage increasing fiscal pressures.”

Specific Examples of Planned Disposals

Medway Council in Kent announced its asset disposal plan featured the sale of a retail complex in Rainham and a community venue in another town to generate £20m over five years.

• Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.

Council Tax Rises and Wider Financial Strains

The survey of councils in the key cities group, which includes several urban centers, further found that more than 70% of authorities will need to increase local levies next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.

Medway council said it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.

“We are taking innovative approaches but some of these take time to deliver both better provisions and financial savings,” said a council leader.

He added: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”

National Patterns and Projections

Research of county councils recently further found council budgets being stretched by the increasing figures of young people and older individuals requiring Send support.

A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.

Government officials have delayed scheduled changes to the Send system until next year after a white paper outlining those changes was recently delayed.

Disadvantage and Financial Shortfalls

Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most disadvantaged in England.

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

“While only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the scale of challenges facing municipal officials across key cities in the next twelve months,” the report concluded.

“Council officials have been clear about the need for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and need,” said a council leader.

“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”

One in five of local authorities have reduced or weakened care services in the last year, the survey revealed.