Bromley Council is facing a significant budget shortfall, with an estimated £58.9 million gap projected for 2026/27, which could rise to £74.7 million by 2029/30. The council's Executive, Resources and Contracts Policy Development and Scrutiny Committee discussed the financial challenges at a meeting on 9 October 2025.
The projected budget gap is due to a combination of factors, including the impact of the 2024/25 outturn, inflation, and the anticipated outcome of the Fair Funding 2.0 proposals. High inflation in areas such as social care and housing continues to pose a risk to the budget. According to a report presented to the committee, without transitional protection for three years, the council could face a real terms reduction in grant funding of £6 million per annum due to the Fair Funding 2.0 proposals.
Due to 'floors' there is expected to be no cash reduction in funding for Bromley, but the Council will not receive inflationary increases or additional funding in the future until the Council moves above the 'floor'. In summary, the Council faces a reduced spending power due to inflation and rising Service demand.
Other potential demands on the budget include the impact of proposed reductions to the Integrated Care Board's (ICB's) running costs and uncertainty around the Dedicated Schools Grant (DSG). The ICB is also mentioned in relation to the commissioning of a new Bromley Mental Health and Wellbeing Hub. Further clarity regarding the DSG is expected from Central Government this Autumn, coinciding with the anticipated publication of the Special Educational Needs and Disabilities (SEND) Review findings.
The Senior Leadership Team is monitoring the budget, and measures have been taken to enhance revenue budget monitoring and management processes. This includes the establishment of the 'Growth Reduction Board', which has enhanced Chief Officer oversight of revenue budget monitoring, growth mitigation and the delivery of agreed Transformation savings.
The Budget Strategy has to continue to be set within the context of continuing cost pressures. Next steps for Transformation, the Medium-Term Financial Strategy (MTFS) and Budget Planning Decisions, savings proposals will be presented at Committee in November and December and the MTFS discussed and agreed in January, in advance of the Budget approval at Council in late February next year.
Work will also continue to lobby Government for a fairer funding deal for Bromley, with the Autumn Budget 2025 expected on 26 November and the Provisional Local Government Finance Settlement for England in 2026/27 expected to be announced mid-December.
The report of the Executive, Resources and Contracts Policy Development and Scrutiny Committee meeting held on 15 September 2025 mentions that there needed to be a wider review across the whole of treasury management, particularly given the overall reduction in the Councils revenue reserves and this review would be undertaken considering the outcome of the 2026/27 Budget and its impact on revenue reserves.