According to a new study of municipal councils, UK councils are preparing to offload community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling public land and land to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would focus on service redesigns and using savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent said its asset disposal plan included the sale of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will additionally be sold under the plan.
Local Levy Increases and Wider Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will have to raise local levies next April to address the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both improved services and financial savings,” said a council leader.
He continued: “There are population challenges which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils recently also found local finances being stretched by the growing number of children and adults requiring Send support.
A network of councils said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the 2025 IMD measures,” noted the study.
“Although only one key city 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 extent of difficulties confronting municipal officials across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and need,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have cut or compromised social care provision in the last year, the study found.
