Based on a latest study of municipal councils, English councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and open spaces to shore up their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and using savings to weather growing fiscal pressures.”
Detailed Cases of Proposed Disposals
One local authority in southeast England announced its property management strategy included the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Financial Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase council taxes next spring to address the rising cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed 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 creative strategies but certain measures take time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Projections
Research of regional authorities recently further found council budgets being strained by the growing number of young people and adults needing special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the 2025 deprivation indices,” noted the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of challenges confronting municipal officials across key cities in the next twelve months,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and need,” stated a council leader.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, 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.
