Council Leader Colin Smith said last year’s Fair Funding Review which reduced Bromley’s grant by £22.2m was “punishing endeavour and rewarding waste”
Bromley Council has asked the Government to raise its council tax above the usual 5 per cent in the face of its “biggest ever financial challenge”.
Council Leader Colin Smith blamed a lack of Government funding and an increase in demand for council services for the move and said last year’s Fair Funding Review which reduced Bromley’s grant by £22.2m was “punishing endeavour and rewarding waste”.
The South East London authority is having conversations with top civil servants about becoming the fifth London borough to exceed the 5 per cent council tax cap and the eventual rise could be at least 10 per cent.
Bromley Council needs to plug a budget gap predicted to reach £61m by 2028. Cllr Smith knew the news would not go over well with Bromley residents and said raising tax was the “antithesis” of what he believed in.
He said: “I expect them to be very, very angry, and so am I. I’m very angry that Bromley’s been put in this position. I wish we hadn’t been. I don’t like it anymore than any other Bromley taxpayer, of which I am one.
“I’m appalled we’ve been put in this position, but frankly, to ignore the position we’re in would be a complete abdication of responsibility. It would be easy to boot it down the road and hope it goes away, but it isn’t going away.”
When asked how much Bromley would seek to raise its council tax if given permission, the council leader told the Local Democracy Reporting Service (LDRS): “We would have to consider a double figure rise of whatever magnitude. I wouldn’t want to put a number on that because it would be speculative.”
Cllr Smith promised Bromley residents it would not be raising its taxes by 100 per cent as has been suggested in Westminster. He also said the council was yet to decide whether this rise would be a one-off increase or spread over a number of years.
Bromley’s funding reduced by over £20m
As a result of last year’s Fair Funding Review which overhauled the level of funding local authorities received from central Government, Bromley will receive £22.2m less in Government grants by 2028/29, the sixth highest reduction of any London borough council.
Alongside this reduction in funding, the council projects net cost increases of £9m for children’s services, £2.3m for housing, and £16.8m for adult services this year.
Four of the five London boroughs with higher funding reductions have been granted permission to raise their council tax above the usual five per cent. Bromley is now asking the Government for permission to join them.
Cllr Colin Smith said last year’s decision by the Government to set the average London Band D council tax as £1,982 was “absolutely wrong and illogical”. Band D is used to determine the average household when it comes to council tax.
Bromley’s current Band D council tax charge is £1629.53 (not including the GLA precept of £510.51), £353 less than what the Government said is needed for councils to meet their revenue requirements.
Other London councils have considerably lower Band D charges—Westminster’s is £537.34, for example. However, these councils have been granted permission to raise their council tax above the 5 per cent cap in order to make up the shortfall caused by the funding changes.
Cllr Smith feels that because Bromley’s funding gap is considerably less, the Government is more reluctant to allow them to raise tax although they are staring at an estimated £61m budget deficit in two years’ time.
He said: “I think hard work and efficiency should be rewarded and not punished, and I think spendthrift and waste should be punished and not rewarded.
“What I cannot for the life of me understand is why councils who have done the right thing and kept costs down, are actually being punished a second time and being told that our council tax is too low.
“The reason it’s too low is because we’ve been low spending and efficient, and yet our money is being taken away and being sent to other boroughs with massive debts to effectively subsidise their interest payments.”
He has already had conversations with senior civil servants and is writing a letter this week to the Chancellor of the Exchequer John Healey and the Secretary of State for Housing, Communities and Local Government Angela Rayner requesting additional meetings.
Cllr Smith said: “The one thing that’s been so frustrating is we’re not getting a sense that the urgency of the request is being fully appreciated. We must have some pace on the decision making to head off what are otherwise going to be some incredibly unpalatable decisions heading towards the February budget.”
Three-weekly bin collections a possibility
The council leader warned residents of what Bromley faced if the council was denied the council tax rise. The authority must continue to fulfil its statutory commitments such as social care, and so certain non-statutory services could be reduced or cut altogether.
Bromley might have to move to three-weekly bin collections, potholes and roads will not be repaired as quickly, grass verges won’t be cut as often and parks and green spaces won’t be as well maintained.
“This makes our lobbying of the Government for this permission so important so that Bromley can continue to look like the Bromley we’ve all come to love and enjoy living in”, added Cllr Smith.
He traced the funding problems all the way back to when Tony Blair was in power and money was moved away from London councils to towns and cities in the Midlands and the North.
The Tory leader blamed successive governments—Labour, Lib Dem and Conservative—for kicking the can down the road and not solving the issue of local government finance.
Cllr Smith also acknowledged the effects of Brexit, the Covid pandemic and the war in Ukraine, but felt the recent Fair Funding Review was the final nail in the coffin.
He said: “The only reason our tax is low is because we’ve been efficient. [The Government] is now telling us that Band D tax should be at £1,982. We can’t do much about that, but if you want us to comply with your directions, you’ve got to allow us to raise tax.”
The Bromley Council Leader preferred a tax rise over taking a Government loan, something he described as a “Mafioso scheme” that would leave the authority in an even more precarious financial position in future.
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