Based on a new study of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of councils are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of public land and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to weather increasing fiscal pressures.”
Detailed Cases of Planned Sales
One local authority in southeast England announced its property management strategy featured the sale of a retail complex in a local town and a social club in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Pressures
The survey of councils in the coalition, which includes several urban centers, also found that more than 70% of councils will need to increase local levies next spring to cover the rising cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to deliver both improved services and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of regional authorities this week also found council budgets being strained by the increasing figures of children and older individuals requiring Send support.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, many key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the 2025 deprivation indices,” said the report.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the extent of challenges facing local leaders across major urban centers in the coming year,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the study revealed.
