According to a new study of local authorities, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling public land and land to support their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of authorities attempting to raise money from a fire sale of assets 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 manage growing financial challenges.”
Specific Examples of Proposed Sales
One local authority in Kent said its property management strategy featured the disposal of a shopping centre in a local town and a social club in another town to generate £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases 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 have to raise council taxes next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches 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 continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
Research of regional authorities recently further found local finances being stretched by the increasing figures of young people and older individuals needing special educational assistance.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (IMD) covering English councils, several participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the 2025 IMD measures,” noted the report.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the extent of challenges facing municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and need,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study found.
