According to a new study of local authorities, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling playing fields and open spaces to support their budgets, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would prioritise restructuring services and utilising savings to manage growing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in Kent said its property management strategy featured the disposal of a retail complex in Rainham and a social club in another town to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Increases and Wider Fiscal Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to raise local levies next April to cover the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both better provisions and cost efficiency,” said 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 drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils this week also found council budgets being strained by the increasing figures of young people and adults requiring special educational assistance.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (IMD) covering English councils, many key cities members were included in the most deprived in England.
- “Member cities like several major towns place in the top 30 nationally under the 2025 deprivation indices,” noted the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The data highlights the extent of challenges confronting municipal officials 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 reflects and addresses the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the study revealed.
