Based on a new study of municipal councils, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in England stated that six out of ten of local authorities are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to shore up their budgets, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
This coalition noted that a significant number of authorities attempting to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using savings to weather increasing fiscal pressures.”
Detailed Cases of Proposed Disposals
One local authority in Kent said its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in another town to raise £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.
Council Tax Rises and Broader Fiscal Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise council taxes next spring to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to achieve both improved services and financial savings,” said Vince Maple.
He added: “We face population challenges which will persist to add to 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.”
National Patterns and Projections
Research of county councils recently also found local finances being stretched by the growing number of young people and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the 2025 deprivation indices,” noted the study.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the scale of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study revealed.
