Bromley could become the sixth London borough to raise council tax bills significantly above the usual maximum. The council has held “high level talks with senior civil servants” about exceeding the 5% cap the Government places on bill increases.
Funding cuts and budget deficit
The local authority said it will see £30.5m stripped from its funding in real terms by 2028/29 and is facing “by far the biggest financial challenge” it has ever seen. Without extra financial support, Bromley Council said it is facing a “serious” budget deficit of £43m next year, rising to £61m in 2028.
Council leader Colin Smith said: “We have always sought to be straight with residents and explain things how they really are and without doubt, this is by far the biggest financial challenge the council has ever faced.
“Unlike other councils, Bromley’s careful financial management over many years means that we are not about to financially crumble overnight but the stark and limited options available to us are increasingly apparent, which is why I want to share wider awareness of the severity of the situation.
“The Government’s decision to reduce Bromley’s funding by over £30m by 2028 leaves us with no other viable option than to consider a higher than desirable council tax increase and that is the painful exercise we have now had to embark on.
“To that end I can also confirm that high level talks with senior civil servants have already taken place requesting that Bromley’s name be added to the list of those other London boroughs also blighted by the Government’s recent financial ‘reforms’ who have been granted permission to exceed the 4.99% cap and we now wait to hear back in due course.”
Other boroughs affected
Five London boroughs - Wandsworth, Kensington and Chelsea, Hammersmith and Fulham, Westminster and the City of London - face having to impose the largest council hikes ever seen next year. Under Labour’s Fairer Funding Review the councils, along with Windsor and Maidenhead, will see the largest cuts to funding settlements.
The six town halls are exempt from the cap on raising council tax, set at 5%, from next year, which means residents’ payments will likely need to rise well above the national maximum to make up shortfalls.
Wandsworth, Kensington and Chelsea and Westminster councils are expected to launch a legal process challenging the Government’s decision to slash their funding next week. Wandsworth and Westminster set the lowest council tax rate in the country at less than £1,050 for benchmark Band D homes, including the £510 City Hall surcharge. In Bromley, annual bills are more than double the cost from average households at £2,140.
Government response
Ministers have argued that the six local authorities have had “historically very low bills” and local leaders will be given “flexibility” for two years to increase them above cap.
A Government spokesperson added: "We have consulted extensively on reforming the outdated council funding system to ensure money goes where it is most needed, following on from a long-standing consensus."
"We're also protecting councils through transitional arrangements so no area faces a cliff edge."
