According to a latest study of municipal councils, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of authorities attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and using savings to weather growing financial challenges.”
Specific Cases of Planned Sales
One local authority in southeast England said its asset disposal plan included the disposal of a shopping centre in a local town and a social club in another town to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned 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 key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise council taxes next spring to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He continued: “We face population challenges which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of county councils recently further found council budgets being strained by the increasing figures of children and older individuals requiring Send support.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (IMD) for English councils, many key cities members were among the most deprived in England.
- “Member cities like several major towns place in the top 30 across the country under the 2025 deprivation indices,” said the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the extent of challenges confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey revealed.
