According to a new study of municipal councils, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of playing fields and land to shore up their finances, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of authorities attempting to raise money from a quick sale of holdings represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in southeast England announced its property management strategy included the disposal of a shopping centre in a local town and a social club in another town to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Financial Strains
The survey of local authorities in the coalition, which covers several urban centers, further found that more than 70% of councils will have to raise council taxes next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but some of these take time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “There are population challenges which will continue to add to 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.”
National Trends and Forecasts
A survey of county councils this week further found local finances being strained by the increasing figures of young people and older individuals needing special educational assistance.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until next year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (IMD) for UK local authorities, many key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 across the country under the 2025 IMD measures,” noted the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of challenges confronting municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the study found.
