Bromley Council is facing a projected £10.7 million overspend for the 2025/26 financial year, according to a provisional outturn report presented to the Executive committee.

The report, discussed at the Executive meeting on Wednesday 24 June 2026, highlighted that the overspend is primarily attributed to additional growth and cost pressures across several key portfolios.

The Adult Care and Health portfolio had a projected outturn variation of £6,146,000, Children, Education & Families had a variation of £1,292,000, Environment & Community had a variation of £1,299,000, and Renewal, Recreation & Housing had a variation of £2,236,000. The Capital Outturn Report 2025/2026 also notes slippage across Renewal, Recreation & Housing, Environment and Community Services, Resources, Commissioning and Contracts Management, and Children, Education and Families.

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While the council's financial position at the end of the 2025/26 financial year showed no net movement in general fund balances, this was achieved through a reduction in the use of reserves to support the budget and outturn. The amount of reserves used to balance the 2025/26 budget and outturn has been reduced from £13,530,000 to £9,558,000. The General Fund Balance as at 31st March 2026 is projected to be £20,000,000.

Several factors contributed to mitigating the overall financial impact, including an increase in interest on balances, the release of central contingency funds, and a balance sheet review. However, the report also detailed requests for carry forwards and proposed transfers to earmarked reserves for IT Innovation, Revenue Collection, and Elections.

Proposed Transfers to Earmarked Reserves:

  • IT Innovation Fund: A transfer of £950,000 is proposed to establish a dedicated fund aimed at accelerating the delivery of efficiencies, improved value for money, and both cashable and non-cashable savings across the Council's services. Expected outcomes include modernising service delivery, reducing demand, or optimising operational processes through robust, evidence-based initiatives with quantified savings and wider benefits.
  • Revenue Collection Reserve: A transfer of £1,166,000 is proposed to manage receipt of different one-off grants and income to meet the cost-of-service initiatives in relation to the collection of £390m in council tax and business rates. This includes funding for initiatives to increase performance, court cost income/expenditure, and contract penalties/incentives.
  • Elections Reserve: A transfer of £298,000 is proposed to help manage unforeseen, one-off costs that may arise when running elections. This will ensure operational resilience by covering urgent expenses such as emergency staffing or venue changes, and will also cover costs relating to new burdens from recent legislation changes.

Future Financial Outlook and Mitigation Measures:

The meeting information does not directly state the projected impact of the overspend on council services or potential service cuts. However, the Provisional Final Outturn 2025/2026 report indicates that significant pressures remain across the Council compared with the 2026/27 budget. The report highlights that Without containment of growth/cost pressures or delivery of the combined mitigation and transformation savings the budget gap would in future years increase. If these challenges are not addressed, the council may need to seek Exceptional Financial Support (EFS), which would represent a significant shift from its current position of no external borrowing to potentially borrowing to support day-to-day revenue expenditure.

Measures are being considered and implemented to prevent similar overspends. The LGA Corporate Peer Challenge Action Plan recommends Immediately address the reliance on reserves to balance the budget by identifying recurring savings and income generation opportunities, and expand growth reduction demand management initiatives. The Provisional Final Outturn 2025/2026 report also mentions the introduction of Growth Reduction Boards as a positive step in strengthening challenge and scrutiny of growth proposals. Furthermore, it emphasizes the need to continue to 'live within its means' and for Chief Officers to identify mitigating actions to address in-year cost pressures and mitigate against inflation.

The LGA Corporate Peer Challenge report also notes that At the current rate of use, reserves would be fully depleted by 2028/29, or sooner if overspends continue or planned savings are not fully delivered. The strategy for replenishing reserves, as outlined in the LGA Corporate Peer Challenge Action Plan, is to Aim over the forecast period (2029/30) to deliver a balanced budget without the use of reserves: (a) identifying recurring savings and income generation opportunities (including fees, charges and commercialisation) in the Medium-Term Financial Strategy (MTFS).

The Capital Outturn Report 2025/2026 mentions potential future schemes that may require capital funding, such as Further works to depots , Replacement of key IT systems not included in existing proposals , and Outcome of any future review of the Council's estate . It also notes that potential cost changes to schemes currently included in the capital programme which, once fully assessed, may increase expenditure or reduce anticipated capital receipts not yet reflected in the financial forecast.

For more details, refer to the Public reports pack Wednesday 24 June 2026 19:00 Executive and the Agenda frontsheet Wednesday 24 June 2026 19:00 Executive.