Based on a new study of local authorities, UK councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and land to shore up their finances, but they contend they must proceed to generate essential revenue 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 marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and utilising financial reserves to weather growing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will additionally be sold under the strategy.
Local Levy Rises and Broader Financial Pressures
The survey of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of councils will have to raise council taxes next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” said a council leader.
He added: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
Research of regional authorities this week also found council budgets being strained by the growing number of children and adults needing Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the 2025 IMD measures,” noted the study.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of challenges facing local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the survey found.
