According to a latest study of municipal councils, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to support their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of authorities seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its property management strategy featured the sale of a retail complex in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Increases and Broader Fiscal Strains
This research of local authorities in the coalition, which covers several urban centers, also found that more than 70% of councils will need to increase local levies next April to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and financial savings,” said a council leader.
He continued: “There are population challenges which will continue to increase 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 Forecasts
A survey of county councils this week also found council budgets being stretched by the growing number of young people and adults 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 cope with rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (IMD) for English councils, several key cities members were among the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the 2025 IMD measures,” said the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The data underscores the extent of difficulties facing municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised care services in the last year, the survey found.
