Based on a new study of municipal councils, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of public land and land to support their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of councils seeking to raise money from a quick sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to manage growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in another town to generate 20 million pounds over five years.
- A local golf course and business parks held in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Pressures
The survey of councils in the coalition, which covers several urban centers, also found that more than 70% of authorities will have to raise council taxes next April to cover the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these require time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will persist to increase the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Trends and Projections
A survey of county councils this week further found council budgets being strained by the increasing figures of children and adults requiring special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (IMD) for English councils, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the 2025 deprivation indices,” said the study.
“While only one key city is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have cut or compromised care services in the past 12 months, the survey found.
