Based on a recent poll of municipal councils, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and open spaces to shore up their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of councils attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in southeast England said its asset disposal plan included the sale of a shopping centre in Rainham and a social club in Rochester to raise £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Rises and Wider Financial Pressures
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase local levies next spring to address the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures take time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently also found council budgets being strained by the increasing figures of children and adults needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a policy document setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the 2025 IMD measures,” said the study.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and demand,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
