Based on a latest poll of municipal councils, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of local authorities are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of playing fields and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of authorities attempting to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Specific Cases of Planned Sales
Medway Council in Kent announced its asset disposal plan included the disposal of a shopping centre in a local town and a social club in another town to generate £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Increases and Broader Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of authorities will need to increase local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and financial savings,” stated Vince Maple.
He added: “We face population challenges which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of regional authorities this week further found local finances being strained by the growing number of children and older individuals requiring special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (IMD) for UK local authorities, many key cities members were among the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the 2025 deprivation indices,” noted the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of challenges facing municipal officials across major urban centers in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and responds to the real levels of disadvantage and demand,” said a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey found.
