Based on a recent survey of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling playing fields and land to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of councils seeking to generate funds from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would focus on restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in Kent said its property management strategy included the disposal of a retail complex in a local town and a social club in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Wider Financial Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise council taxes next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority 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 temporary accommodation.
“We are adopting creative strategies but some of these take time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities this week also found council budgets being stretched by the growing number of young people and adults needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (IMD) for English councils, several key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 nationally under the 2025 deprivation indices,” noted the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of challenges confronting municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened care services in the last year, the survey revealed.
