According to a recent poll of local authorities, English councils are planning to offload community centers, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of public land and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of authorities seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and utilising financial reserves to weather growing financial challenges.”
Detailed Cases of Planned Sales
Medway Council in southeast England announced its property management strategy included the disposal of a retail complex in Rainham and a community venue in Rochester to generate 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Increases and Wider Fiscal Strains
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to raise local levies next April to address the rising cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
Medway council explained it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to achieve both improved services and cost efficiency,” stated Vince Maple.
He continued: “We face demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Projections
Research of regional authorities recently also found council budgets being strained by the increasing figures of children and adults requiring Send support.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (IMD) for UK local authorities, several participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the 2025 deprivation indices,” noted the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study found.
