Based on a new poll of local authorities, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England stated that six out of ten of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling public land and land to support their finances, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of councils attempting to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Local Levy Increases and Wider Fiscal Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise local levies next spring to cover the growing cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities recently further found council budgets being stretched by the increasing figures of young people and adults requiring Send support.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a white paper outlining those changes has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 nationally under the 2025 deprivation indices,” noted the study.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The data highlights the extent of challenges facing municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that accounts for and responds to the actual extent of disadvantage and need,” stated a council leader.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the last year, the survey revealed.
