According to a new survey of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of councils 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 public land and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of authorities seeking to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and using savings to weather increasing financial challenges.”
Specific Examples of Planned Sales
Medway Council in southeast England announced its property management strategy included the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the strategy.
Council Tax Increases and Wider Financial Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next spring to address the rising cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges 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 extremely difficult.”
National Trends and Forecasts
A survey of regional authorities this week further found council budgets being strained by the growing number of children and older individuals requiring special educational assistance.
A network of councils said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes was recently delayed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (IMD) covering English councils, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the 2025 IMD measures,” noted the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of deprivation and demand,” said a council leader.
“Without this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the survey found.
