According to a new study of municipal councils, UK councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of authorities 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 said they would prioritise restructuring services and utilising financial reserves to weather increasing financial challenges.”
Specific Cases of Proposed Sales
One local authority in Kent said its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in another town to generate £20m over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Wider Financial Strains
This research of councils in the coalition, which covers several urban centers, further found that over seven in ten of authorities will have to increase local levies next spring to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures take time to deliver both improved services and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of regional authorities this week also found council budgets being stretched by the increasing figures of children and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have put off planned reforms to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (IMD) for UK local authorities, many participating urban areas were among the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the 2025 deprivation indices,” noted the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the extent of challenges confronting municipal officials across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and need,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study revealed.
