Based on a recent survey of local authorities, UK councils are preparing to sell community centers, athletic facilities, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that 60% of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a high proportion 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 stated they would prioritise service redesigns and using financial reserves to manage increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in Kent said its property management strategy featured the disposal of a retail complex in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will additionally be sold under the strategy.
Local Levy Increases and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of authorities will have to raise council taxes next April to address the growing cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both better provisions and financial savings,” stated a council leader.
He added: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
Research of county councils this week also found local finances being strained by the growing number of children and older individuals requiring Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were among the most deprived in England.
- “Member cities like several major towns place in the top 30 nationally under the 2025 IMD measures,” noted the report.
“Although 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 data underscores the extent of difficulties confronting municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and addresses the real levels of deprivation and demand,” stated a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study found.
