Based on a new survey of municipal councils, UK councils are planning to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England stated that six out of ten of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and open spaces to support their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and utilising savings to weather growing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in southeast England said its property management strategy included the disposal of a retail complex in Rainham and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Wider Financial Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise local levies next April to cover the growing cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both improved services and cost efficiency,” stated Vince Maple.
He added: “We face demographic pressures which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of county councils recently further found local finances being stretched by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the Send system until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the extent of challenges facing municipal officials across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the study found.
