Based on a latest study of local authorities, UK councils are preparing to offload community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of local authorities 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 support their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of authorities seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and utilising savings to weather growing financial challenges.”
Specific Examples of Planned Sales
Medway Council in southeast England said its property management strategy featured the sale of a shopping centre in Rainham and a social club in another town to generate £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Increases and Broader Financial Strains
The survey of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of authorities will have to raise council taxes next April to address the growing cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales 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 taking creative strategies but some of these require time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Projections
Research of county councils recently further found council budgets being stretched by the increasing figures of children and older individuals requiring Send support.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (IMD) for UK local authorities, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the 2025 deprivation indices,” noted the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The figures highlights the extent of challenges facing municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and need,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the past 12 months, the survey revealed.
