According to a new survey of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of local authorities are planning to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for selling public land and land to support their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of authorities seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to weather increasing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a social club in another town to generate £20m over the next half-decade.
- 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 strategy.
Local Levy Increases and Wider Fiscal Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise local levies next spring to address the rising cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
The authority said it will proceed with property disposals 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 taking creative strategies but some of these take time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities recently further found local finances being strained by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the Send system until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (IMD) covering English councils, many key cities members were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the 2025 IMD measures,” noted the study.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of councils have reduced or weakened care services in the last year, the study found.
