According to a latest study of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of authorities seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of local leaders stated they would prioritise restructuring services and using financial reserves to manage growing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in southeast England announced its property management strategy included the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Strains
This research of local authorities in the coalition, which covers several urban centers, further found that more than 70% of councils will have to increase local levies next April to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will persist to add to the pressures 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 Patterns and Projections
A survey of county councils this week further found local finances being strained by the increasing figures of young people and adults requiring Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the 2025 IMD measures,” said the report.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties confronting municipal officials across key cities in the coming year,” the report added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and demand,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study found.
