According to a recent study of local authorities, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and open spaces to shore up their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of authorities attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and using savings to manage increasing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a retail complex in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Increases and Wider Fiscal Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase local levies next April to address the rising cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
Research of regional authorities recently further found council budgets being strained by the growing number of children and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the 2025 IMD measures,” said the study.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the scale of difficulties facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of councils have cut or compromised care services in the past 12 months, the survey revealed.
