🔗 Share this article

According to a new survey of municipal councils, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.

Increasing Fiscal Pressures Drive Asset Sales

The Key Cities Group representing second-tier cities in the UK stated that 60% of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.

Local governments have previously faced criticism for disposing of playing fields and open spaces to support their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.

The group noted that a significant number of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and using financial reserves to weather increasing fiscal pressures.”

Specific Examples of Proposed Disposals

One local authority in Kent announced its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over the next half-decade.

• A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.

Local Levy Rises and Broader Financial Strains

This research of councils in the key cities group, which covers several urban centers, further found that more than 70% of councils will have to raise council taxes next April to cover the rising cost of core provisions, higher levels of homelessness, 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, elderly and disability services, and short-term housing.

“We are adopting creative strategies but some of these require time to deliver both better provisions and cost efficiency,” said a council leader.

He continued: “There are demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”

National Trends and Forecasts

Research of county councils this week also found council budgets being strained by the growing number of children and older individuals needing special educational assistance.

A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.

Ministers have delayed planned reforms to the Send system until the coming year after a policy document outlining those reforms has been postponed.

Deprivation and Financial Shortfalls

According to the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most deprived in the country.

• “Participating urban centers like several major towns place in the top 30 nationally under the 2025 deprivation indices,” noted the study.

“While only one key city is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The figures underscores the extent of challenges confronting municipal officials across major urban centers in the next twelve months,” the report added.

“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” stated a council leader.

“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.”

One in five of councils have cut or compromised care services in the last year, the survey revealed.