According to a recent survey of municipal councils, English councils are preparing to sell community centers, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and open spaces to support their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of authorities attempting to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would prioritise service redesigns and utilising financial reserves to weather growing financial challenges.”
Specific Cases of Planned Sales
Medway Council in southeast England said its property management strategy featured the sale of a shopping centre in a local town and a social club in another town 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 Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Strains
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase council taxes next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils recently also found council budgets being strained by the increasing figures of children and older individuals needing special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a policy document setting out those changes has been postponed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (IMD) covering UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the 2025 IMD measures,” noted the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of difficulties facing municipal officials across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and need,” stated Michael Mordey.
“Without this, councils will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the study revealed.
