According to a latest study of municipal councils, English councils are planning to offload community centers, athletic facilities, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to support their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage growing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in Kent said its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Broader Fiscal Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase council taxes next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils this week also found council budgets being strained by the increasing figures of children and older individuals needing Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper outlining those changes has been postponed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (IMD) covering UK local authorities, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the 2025 IMD measures,” said the study.
“While only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties confronting local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study found.
