According to a new survey of municipal councils, English councils are planning to offload community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and land to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of councils seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Detailed Cases of Proposed Sales
One local authority in southeast England announced its property management strategy featured the disposal of a shopping centre in a local town and a social club in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the plan.
Council Tax Increases and Wider Fiscal Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase local levies next spring to address the rising cost of core provisions, 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 children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of regional authorities this week further found council budgets being strained by the growing number of children and older individuals needing special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a white paper outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the 2025 deprivation indices,” said the report.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of challenges confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study found.
