Based on a recent survey of local authorities, UK councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and open spaces to support their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition said that a significant number of councils attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise restructuring services and using savings to weather growing fiscal pressures.”
Specific Cases of Planned Sales
Medway Council in southeast England announced its property management strategy included the disposal of a shopping centre in Rainham and a social club in another town to raise 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Rises and Broader Fiscal Strains
This research of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of authorities will need to raise local levies next spring to address the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “There are population challenges which will persist to add to the strains 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 Trends and Projections
A survey of county councils recently also found council budgets being strained by the growing number of children and adults needing special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 across the country under the 2025 IMD measures,” noted the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of England. The data highlights the scale of difficulties confronting local leaders across key cities in the coming year,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised care services in the last year, the study found.
