Based on a recent study of municipal councils, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in the UK reported that six out of ten of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and land to support their finances, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
The group said that a significant number of councils seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Specific Examples of Proposed Sales
Medway Council in southeast England announced its asset disposal plan included the disposal of a retail complex in Rainham and a social club in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Pressures
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase council taxes next April to address the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “There are 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 extremely difficult.”
National Trends and Projections
A survey of regional authorities recently further found local finances being stretched by the increasing figures of young people and older individuals needing Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those changes has been postponed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the 2025 IMD measures,” said the report.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, 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 analysis added.
“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking 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 communities.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
