According to a recent poll of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in the UK stated that 60% of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and land to shore up their budgets, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and using savings to manage growing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in Kent announced its asset disposal plan included the sale of a retail complex in Rainham and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and business parks held in two English counties, which all provide rental income for the authority, will also be sold under the plan.
Local Levy Rises and Wider Fiscal Strains
The survey of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will have to increase local levies next spring to address the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
Research of regional authorities this week also found local finances being strained by the increasing figures of children and older individuals needing special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were among the most disadvantaged 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 report.
“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of England. The data underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and demand,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey found.
