According to a latest survey of municipal councils, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England 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.
Councils have in the past come under fire for disposing of playing fields and land to support their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of councils attempting to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and using savings to weather growing financial challenges.”
Detailed Cases of Proposed Sales
One local authority in Kent announced its property management strategy featured the disposal of a retail complex in a local town and a community venue in another town to raise £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Broader Fiscal Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise local levies next April to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and financial savings,” said Vince Maple.
He continued: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities this week further found council budgets being stretched by the increasing figures of young people and older individuals 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 rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the 2025 IMD measures,” said the report.
“While only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the extent of difficulties confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and need,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study found.
