Based on a new survey of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would prioritise service redesigns and using savings to manage increasing financial challenges.”
Specific Examples of Proposed Sales
One local authority in Kent said its property management strategy featured the sale of a shopping centre in a local town and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of authorities will have to increase council taxes next April to cover the rising cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to deliver both improved services and financial savings,” said a council leader.
He added: “We face population challenges which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of regional authorities this week also found council budgets being stretched by the growing number of young people and older individuals needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were among the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the 2025 IMD measures,” said the study.
“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The figures underscores the extent of challenges confronting local leaders across key cities in the coming year,” the report added.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that reflects and addresses the actual extent of deprivation and need,” said a council leader.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have cut or compromised care services in the past 12 months, the study found.
