According to a latest survey of municipal councils, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Growing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and open spaces to shore up their finances, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
The group said 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 local leaders stated they would focus on service redesigns and utilising savings to manage growing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in Rochester to raise £20m 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 also be disposed of under the plan.
Council Tax Rises and Broader Financial Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase local levies 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 property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils recently further found council budgets being stretched by the growing number of young people and older individuals requiring special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Deprivation and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 across the country under the 2025 IMD measures,” said the report.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the extent of challenges facing local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
