According to a new survey of local authorities, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of councils are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Planned Sales
One local authority in southeast England announced its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase council taxes next April to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and cost efficiency,” said a council leader.
He added: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
A survey of regional authorities this week also found council budgets being strained by the increasing figures of young people and older individuals needing special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (IMD) covering English councils, many participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the 2025 IMD measures,” noted the report.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the extent of challenges facing local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of councils have reduced or weakened care services in the last year, the survey revealed.
