Based on a new study of municipal councils, UK councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to support their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a high proportion of councils seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and utilising savings to weather increasing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in southeast England said its asset disposal plan featured the sale of a retail complex in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Increases and Broader Fiscal Pressures
This research of local authorities in the coalition, which includes several urban centers, also found that more than 70% of councils will have to increase council taxes next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
A survey of regional authorities recently further found council budgets being stretched by the increasing figures of young people 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 struggle to manage increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the 2025 deprivation indices,” noted the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of the nation. The data highlights the extent of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the survey revealed.
