According to a new survey of municipal councils, UK councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of councils are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and open spaces to support their budgets, but they contend they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of authorities attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and utilising financial reserves to manage growing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in Kent said its property management strategy included the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Rises and Wider Financial Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase local levies next April to address the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and financial savings,” stated a council leader.
He added: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils recently also found local finances being strained by the growing number of children and older individuals needing special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have put off scheduled changes to the Send system until the coming year after a white paper outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (IMD) for English councils, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the 2025 IMD measures,” said the study.
“While only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of England. The figures highlights the extent of difficulties facing municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the survey found.
