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 Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of authorities attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to weather growing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in southeast England announced its property management strategy included the sale of a shopping centre in Rainham and a community venue in Rochester to raise 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be sold under the strategy.
Local Levy Increases and Wider Fiscal Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise council taxes next spring to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority explained 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 temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils this week further found local finances being stretched by the growing number of young people and older individuals needing Send support.
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 the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the 2025 IMD measures,” said the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of difficulties facing municipal officials across key cities in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and demand,” said a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
