Based on a new study of local authorities, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of local authorities are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and land to support their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a high proportion of councils attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and using savings to weather growing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in Kent announced its property management strategy included the sale of a retail complex in a local town and a social club in another town to generate 20 million pounds over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Broader Fiscal Pressures
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase council taxes next April to cover the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both improved services and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils recently also found council budgets being stretched by the growing number of young people and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (IMD) covering English councils, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the 2025 deprivation indices,” noted the study.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of the nation. The figures highlights the scale of challenges facing local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the last year, the survey revealed.
