Based on a new study of municipal councils, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England stated 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 land to support their finances, but they contend they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of councils attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and using savings to weather growing financial challenges.”
Specific Cases of Proposed Disposals
One local authority in Kent announced its asset disposal plan featured the sale of a shopping centre in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Increases and Broader Financial Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise council taxes next April to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but some of these take time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “There are demographic pressures 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 very challenging.”
National Trends and Projections
Research of county councils this week also found local finances being stretched by the growing number of young people and older individuals requiring special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the 2025 deprivation indices,” said the report.
“Although only one key city is in 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 scale of difficulties confronting municipal officials across key cities in the coming year,” the analysis concluded.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and need,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the study found.
