According to a new poll of municipal councils, UK councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and open spaces to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and using financial reserves to weather increasing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in Kent said its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Strains
The survey of local authorities in the coalition, which includes several urban centers, also found that over seven in ten of councils will need to raise local levies next April to address the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but some of these take time to deliver both better provisions and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils this week also found council budgets being stretched by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials 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 Shortfalls
Based on the most recent deprivation measures (IMD) for UK local authorities, many key cities members were among the most deprived in England.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the 2025 IMD measures,” noted the report.
“Although 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 the nation. The figures highlights the scale of difficulties facing municipal officials across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the last year, the survey found.
