Based on a latest survey of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of councils are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of playing fields and land to support their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage increasing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in southeast England announced its asset disposal plan featured the disposal of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally 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, also found that over seven in ten of authorities will need to increase local levies next spring to address the growing cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both improved services and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities this week further found council budgets being stretched by the growing number of children and older individuals requiring 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 manage rising needs.
Ministers have put off planned reforms to the Send system until next year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the 2025 deprivation indices,” noted the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the scale of challenges confronting municipal officials across key cities in the coming year,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey found.
