According to a latest survey of local authorities, UK councils are preparing to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of local authorities are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and open spaces to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of authorities attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would focus on service redesigns and using financial reserves to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Increases and Broader Fiscal Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise council taxes next April to address the growing cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures take time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will continue 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 Trends and Projections
Research of county councils this week also found local finances being strained by the growing number of children and older individuals needing 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 scheduled changes to the special educational needs framework until next year after a policy document outlining those changes has been postponed.
Deprivation and Financial Shortfalls
Based on the most recent deprivation measures (IMD) for English councils, several participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the 2025 IMD measures,” said the study.
“While only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The figures underscores the scale of difficulties facing local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
