Based on a latest study of local authorities, 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.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of public land and open spaces to support their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of authorities seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using financial reserves to manage growing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in Kent said its property management strategy featured the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Rises and Broader Fiscal Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next April 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 asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and financial savings,” said a council leader.
He continued: “There are 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 very challenging.”
National Patterns and Projections
Research of regional authorities recently further found local finances being strained by the increasing figures of children and adults requiring special educational assistance.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a white paper outlining those changes has been postponed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (IMD) for UK local authorities, several key cities members were among the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 across the country under the 2025 deprivation indices,” noted the report.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of difficulties facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
