According to a recent study of municipal councils, English councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that six out of ten of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling public land and open spaces to support their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a high proportion of authorities seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and utilising savings to manage growing fiscal pressures.”
Specific Cases of Planned Disposals
Medway Council in southeast England announced its property management strategy included the sale of a shopping centre in Rainham and a social club in Rochester to generate 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Increases and Wider Financial Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise local levies next spring to cover the growing cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities this week also found local finances being stretched by the increasing figures of young people and adults needing Send support.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (IMD) for English councils, many participating urban areas were among the most disadvantaged in England.
- “Member cities like several major towns rank in the top 30 across the country under the 2025 deprivation indices,” noted the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The data underscores the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened care services in the last year, the study found.
