According to a new study of municipal councils, UK councils are preparing to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise restructuring services and using savings to manage growing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in Kent said its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase local levies next spring to address the rising cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures take time to achieve both better provisions and financial savings,” said a council leader.
He continued: “There are demographic pressures which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Projections
A survey of regional authorities this week also found council budgets being strained by the increasing figures of young people and adults needing special educational assistance.
A network of councils said that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Ministers have put off planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the 2025 IMD measures,” noted the study.
“While only one key city is in the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures highlights the extent of challenges confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the real levels of deprivation and demand,” said a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of councils have cut or compromised care services in the last year, the survey found.
