Council tax in Bromley set to remain low due to local authority investments

By Kiro Evans, Local Democracy Reporter

Residents in Bromley are set to avoid a council tax hike next year as the council’s £427 million of investments pay off.

While a one per cent rise will go towards social care, the tax heading to the council is set to remain unchanged.

This bucks the trend of tax increases from other local authorities so far, with Bromley councillors hailing their “scrupulous financial management” as the reason.

The council revealed in papers last year that it had placed £427m of its cash reserves in investments and loans.

Senior councillors approved tax plans earlier this week, but it still needs to be rubber-stamped by the full council.

The council says covid government grants and use of collection fund reserves had enabled Bromley to achieve a balanced budget for 2022/23 despite the continued effects of the pandemic, high inflation and additional growth pressures.

Residents will see a one per cent rise for the adult social care precept that the authority says is due to Greater London Authority’s draft budget, which sees an 8.8 per cent rise in tax.

The move by Bromley comes as other local authorities, including Greenwich, Lewisham and Hounslow appear set to hike their council tax by the maximum amount allowed without a referendum of 1.99 per cent.

This rises to 2.99 per cent if you include the adult social care precept, which goes towards social care services.

Councillor Michael Rutherford, executive councillor for resources, commissioning and contract management, said: “It is a source of great pride that we have managed to consistently deliver one of the lowest council tax bills in outer London for Bromley’s residents, while continuing to deliver excellent services and amenities across the borough.

“This has been achieved, and will continue to be achieved, through scrupulous financial management, prudent property administration and trimming away the waste still seen in many local councils. At a time when residents are extremely concerned about the rising cost of living, this commitment and achievement is more important than ever.”

Cllr Rutherford added: “In addition to the minimal overall increase in council tax, the council intends to continue to keep council tax rises below the rate of inflation until at least 2026.”

The council has invested millions of pounds in bonds, which are low risk and should return the money with interest in a set time frame.

As of September 30 last year, Bromley’s portfolio included investments with well-known banks such as Natwest, Santander and Goldman Sachs.

The South London authority also had £60m with banks associated with the Middle East, including Qatar and Kuwait, and £55m loaned with other councils.

In December, Mr Rutherford said:  “I am incredibly proud of our award-winning track record on investment management in the London Borough of Bromley.

“We have recently received national recognition for the outstanding performance of our investment management and its contribution towards reducing costs to the council taxpayer.

“To support key services, including for the most vulnerable, the council produce an annual investment income of around £13.8m per annum. We don’t spend a single penny on debt interest.”