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According to a latest survey of local authorities, UK councils are planning to sell community centers, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.

Increasing Financial Pressures Drive Asset Sales

The Key Cities Group 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.

Councils have previously faced criticism for disposing of public land and open spaces to support their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.

This coalition said that a significant number of councils attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and utilising financial reserves to weather increasing fiscal pressures.”

Detailed Examples of Planned Sales

Medway Council in southeast England said its property management strategy featured the sale of a shopping centre in a local town and a social club in Rochester to raise 20 million pounds over five years.

• A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.

Council Tax Increases and Broader Fiscal Pressures

The survey of councils in the coalition, which includes several urban centers, also found that more than 70% of councils will have to raise council taxes next spring to address the growing cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.

Medway council explained 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 certain measures require time to deliver both better provisions and financial savings,” stated a council leader.

He added: “There are demographic pressures which will persist to add to 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.”

National Trends and Projections

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 projected that council deficits will hit £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 policy document outlining those changes has been postponed.

Deprivation and Funding Shortfalls

Based on the most recent indices of deprivation (IMD) covering English councils, many participating urban areas were among the most disadvantaged in England.

• “Participating urban centers like several major towns rank in the top 30 across the country under the latest deprivation indices,” noted the report.

“Although only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of challenges confronting municipal officials across major urban centers in the coming year,” the report added.

“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and need,” said a council leader.

“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”

One in five of councils have reduced or weakened care services in the past 12 months, the study revealed.