According to a new study of municipal councils, UK councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that 60% of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of authorities seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising savings to weather growing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in southeast England said its asset disposal plan included the sale of a retail complex in Rainham and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Wider Financial Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next April to address the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures require time to achieve both improved services and cost efficiency,” stated a council leader.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of regional authorities recently also found council budgets being stretched by the increasing figures of children and adults requiring special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (IMD) for English councils, several key cities members were among the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the 2025 IMD measures,” noted the report.
“While only one key city is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The data highlights the scale of difficulties facing local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and need,” stated a council leader.
“Without this, local authorities will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study found.
