According to a new survey of municipal councils, UK councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of councils are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of playing fields and open spaces to shore up their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using savings to weather growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England said its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Increases and Broader Financial Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise council taxes next spring to cover the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority said it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to deliver both improved services and financial savings,” stated Vince Maple.
He continued: “There are population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of county councils this week also found local finances being strained by the growing number of children and adults needing special educational assistance.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the 2025 deprivation indices,” said the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties confronting local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and demand,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised care services in the last year, the survey found.
