Based on a recent study of municipal councils, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that 60% of local authorities are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and open spaces to support their budgets, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a high proportion of councils seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and utilising savings to manage increasing financial challenges.”
Specific Cases of Proposed Disposals
One local authority in Kent announced its property management strategy included the disposal of a retail complex in Rainham and a community venue in another town to generate £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase local levies next April to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both improved services and financial savings,” said a council leader.
He added: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils this week also found local finances being strained by the increasing figures of children and adults needing Send support.
A network of councils said that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials 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 Financial Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many participating urban areas were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the 2025 deprivation indices,” noted the study.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of challenges facing local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of deprivation and need,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.
