Based on a new survey of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of public land and open spaces to support their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of authorities seeking to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on restructuring services and utilising savings to weather growing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in southeast England said its property management strategy featured the disposal of a retail complex in a local town and a community venue in another town to generate 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Broader Financial Strains
The survey of local authorities in the coalition, which includes several urban centers, also found that more than 70% of authorities will need to raise council taxes next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “There are demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of regional authorities recently also found council budgets being stretched by the increasing figures of young people and adults needing Send support.
A network of councils said that council deficits will reach £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 policy document outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (IMD) covering UK local authorities, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the 2025 deprivation indices,” said the study.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The data underscores the extent of difficulties confronting municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of deprivation and need,” said a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the last year, the study revealed.
