According to a latest study of municipal councils, UK councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and land to support their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and using savings to weather increasing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in Kent announced its asset disposal plan included the sale of a retail complex in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and business parks held in two English counties, which all generate rent for the authority, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase local levies next spring to address the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both better provisions and financial savings,” said a council leader.
He added: “There are demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of county councils recently further found council budgets being stretched by the growing number of children and older individuals requiring Send support.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the 2025 IMD measures,” noted the study.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of difficulties confronting local leaders across major urban centers in the coming year,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Without 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 local authorities have cut or compromised care services in the last year, the study revealed.
