Based on a new study of municipal councils, UK councils are planning to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK stated that 60% of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of playing fields and land to support their budgets, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and using financial reserves to manage increasing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Council Tax Increases and Broader Financial Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise local levies next April to cover the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and financial savings,” stated a council leader.
He added: “There are demographic pressures which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Patterns and Forecasts
A survey of county councils this week also found local finances being strained by the growing number of young people and adults needing special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton 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 top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the extent of challenges confronting local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study found.
