According to a latest survey of municipal councils, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in England stated that 60% of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling public land and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a high proportion of councils attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and using financial reserves to manage increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Financial Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase council taxes next spring to cover the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council said 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 adopting creative strategies but certain measures require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of regional authorities recently also found council budgets being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 nationally under the 2025 IMD measures,” noted the study.
“While only one key city is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of England. The figures highlights the extent of difficulties confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and demand,” stated a council leader.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study revealed.
