Based on a new study of municipal councils, English councils are planning to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of councils attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and using financial reserves to weather growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its property management strategy included the disposal of a shopping centre in Rainham and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Rises and Broader Fiscal Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both better provisions and financial savings,” said a council leader.
He added: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
Research of regional authorities this week also found local finances being stretched by the growing number of young people and older individuals requiring Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the 2025 IMD measures,” said the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of councils have cut or compromised care services in the last year, the study found.
