According to a new survey of municipal councils, UK councils are preparing to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of local authorities are planning to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and land to shore up their budgets, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of authorities seeking to raise money 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 increasing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in Kent said its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, further found that over seven in ten of authorities will need to increase council taxes next April to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals after steep rises 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 certain measures require time to achieve both better provisions and financial savings,” said a council leader.
He continued: “There are demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Projections
A survey of county councils this week further found council budgets being stretched by the growing number of children and adults needing Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 nationally under the 2025 deprivation indices,” noted the report.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The figures underscores the extent of difficulties facing municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey found.
