Based on a recent study of local authorities, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and land to support their budgets, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
This coalition noted that a high proportion of councils attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and using financial reserves to manage increasing financial challenges.”
Specific Cases of Proposed Sales
Medway Council 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 generate 20 million pounds over five years.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Council Tax Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise council taxes next April to address the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to deliver both better provisions and financial savings,” said a council leader.
He continued: “There are population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils recently also found council budgets being strained by the growing number of young people and older individuals requiring special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the 2025 deprivation indices,” said the report.
“While only one key city is in the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the extent of difficulties confronting local leaders across major urban centers in the coming year,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the study revealed.
