Based on a new survey of municipal councils, UK councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and land to support their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and using savings to weather growing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in Kent said its property management strategy featured the sale of a shopping centre in a local town and a social club in another town to generate £20m over five years.
- 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 Broader Financial Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but some of these take time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “There are population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils recently further found local finances being strained by the increasing figures of young people and adults needing special educational assistance.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in the most deprived in the country.
- “Member cities 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 deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The figures highlights the extent of difficulties facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study found.
