According to a recent poll of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to cover 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 contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of authorities seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and using financial reserves to weather increasing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England announced its property management strategy featured the sale of a retail complex in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Broader Financial Strains
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase council taxes next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both improved services and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities recently further found local finances being stretched by the increasing figures of children and older individuals needing Send support.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (IMD) covering English councils, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 nationally under the 2025 IMD measures,” noted the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The data highlights the extent of difficulties facing local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the last year, the study revealed.
