According to a latest poll of municipal councils, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their finances, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on service redesigns and utilising savings to weather growing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England said its asset disposal plan included the sale of a retail complex in a local town and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Pressures
The survey of local authorities in the coalition, which includes several urban centers, further found that more than 70% of authorities will need to increase local levies next spring to address the rising cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both improved services and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of regional authorities recently further found council budgets being strained by the growing number of children and adults requiring special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have put off planned reforms to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the 2025 IMD measures,” said the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of challenges facing municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting funding system that reflects and addresses the real levels of disadvantage and demand,” said a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the study revealed.
