According to a latest study of municipal councils, English councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Growing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in the UK reported that 60% of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and land to support their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and using financial reserves to manage increasing fiscal pressures.”
Detailed Cases of Proposed Sales
One local authority in southeast England said its property management strategy featured the disposal of a shopping centre in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Pressures
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase local levies next April to address the growing cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
The authority explained it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
Research of regional authorities this week also found council budgets being stretched by the increasing figures of young people and older individuals requiring 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 grapple to manage rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the 2025 IMD measures,” noted the study.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of challenges confronting local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
