Based on a new survey of municipal councils, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England stated that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and open spaces to support their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
This coalition noted that a significant number of authorities seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders said they would focus on service redesigns and utilising financial reserves to weather increasing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in Kent said its property management strategy included the disposal of a retail complex in Rainham and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Financial Pressures
The survey of local authorities in the coalition, which includes several urban centers, also found that over seven in ten of authorities will need to raise council taxes next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council said it will proceed with property disposals after steep rises in the cost of youth support, 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 deliver both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils this week further found council budgets being strained by the growing number of young people and adults needing Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those changes was recently delayed.
Deprivation and Financial Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the 2025 IMD measures,” said the report.
“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The figures highlights the extent of challenges confronting municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the survey revealed.
