According to a recent study of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Financial 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 rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of playing fields and open spaces to support their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of authorities attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to weather growing financial challenges.”
Specific Cases of Proposed Disposals
Medway Council in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in another town to generate £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 disposed of under the plan.
Council Tax Increases and Wider Financial Pressures
The survey of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of authorities will have to increase local levies next April to address the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take 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 pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils recently also found local finances being stretched by the increasing figures of children and adults needing special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (IMD) for UK local authorities, several key cities members were among the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the 2025 IMD measures,” noted the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties facing local leaders across key cities in the next twelve months,” 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 actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the study revealed.
