Based on a new study of municipal councils, UK councils are planning to offload community centers, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that 60% of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and land to support their budgets, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a significant number of councils seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on service redesigns and using financial reserves to weather increasing financial challenges.”
Specific Cases of Planned Sales
One local authority in Kent announced its asset disposal plan included the sale of a shopping centre in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Rises and Wider Financial Pressures
This research of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of councils will have to increase local levies next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to deliver both improved services and financial savings,” said Vince Maple.
He added: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
Research of regional authorities recently also found local finances being stretched by the growing number of young people and adults needing special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (IMD) covering English councils, many participating urban areas were among the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the 2025 deprivation indices,” noted the report.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures highlights the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
