According to a recent study of local authorities, English councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling public land and land to shore up their finances, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a significant number of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would focus on service redesigns and using savings to manage increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England announced its property management strategy featured the disposal of a shopping centre in a local town and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase council taxes next April to cover the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Projections
Research of county councils this week also found council budgets being strained by the increasing figures of children and adults requiring special educational assistance.
A network of councils said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the Send system until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (IMD) covering UK local authorities, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the 2025 deprivation indices,” said the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the scale 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 fair and sustainable funding system that reflects and responds to the actual extent of deprivation and need,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey found.
