According to a new survey of municipal councils, English councils are preparing to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling public land and open spaces to support their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise restructuring services and using savings to weather growing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in southeast England announced its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Strains
The survey of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will need to increase local levies next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to achieve both improved services and financial savings,” stated a council leader.
He continued: “We face population challenges which will persist 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.”
National Trends and Forecasts
Research of county councils this week also found council budgets being strained by the increasing figures of children and older individuals requiring Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 nationally under the 2025 IMD measures,” said the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of England. The data underscores the scale of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders 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 need,” said Michael Mordey.
“Without this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey found.
