Based on a new survey of municipal councils, UK councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and land to support their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and using financial reserves to weather increasing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Financial Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise council taxes next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed 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 taking innovative approaches but some of these require time to achieve both improved services and financial savings,” stated a council leader.
He added: “We face population challenges which will persist 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 extremely difficult.”
Countrywide Trends and Projections
A survey of county councils this week also found local finances being strained by the growing number of young people and adults needing special educational assistance.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the 2025 IMD measures,” noted the study.
“Although only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of challenges facing local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey revealed.
