By Bill Bowkett
The leader of one of London鈥檚 best-run councils has warned of a “2028 sell-by date” for the local authority as financial pressures mount.
Colin Smith, the Conservative leader of Bromley Council in southeast London, said local government stands at a 鈥渃rossroads鈥 with many facing effective bankruptcy in the next Parliament unless their funding is reformed.
It comes as Deputy Prime Minister Angela Rayner looks set to create a 鈥減rogressive鈥 new town hall funding formula, which will see grants redistributed depending on local needs.
The changes, which will be phased in over three years from 2026, are expected to reduce cash received by wealthier authorities in London to support deprived areas of the North.
Economists from the Institude for Fiscal Studies have warned that 鈥渓eafier鈥 suburbs could be hit hard with a 5 per cent council tax bump from Labour鈥檚 reforms.
There are also concerns that the amount Londoners pay to the Mayor of London to fund the Metropolitan Police will also be hiked.
This is coupled with boroughs in the capital receiving around 28 per cent less funding per Londoner compared to 2010, according to research.
While some English authorities such as Croydon have issued Section 114 (bankruptcy) notices, in which they cannot balance its budget and must cease new spending commitments, Bromley was the only area of London whose council was able present a balanced budget in 2025.
But Mr Smith said councils like his are being spun on a 鈥渃onveyor belt of doom鈥 and predicted that spending in areas such as social care for elderly residents and SEND support will soon outpace its reserves.
In an interview with The Standard, Mr Smith confirmed that council tax is set to increase by the maximum 5 per cent legal limit to pay for 鈥減opular services鈥, adding that 鈥渆very single budget line is being looked at鈥 amid a future deficit of 拢34million.
鈥淲e are getting slowly edged closer towards that cliff face that you see some of the less organised and irresponsible councils that have already fallen over,鈥 Mr Smith said. 鈥淲e are watching with huge trepidation.鈥
Mr Smith, who had led Bromley since 2017, also accused Labour, as well as his own party and the Liberal Democrats from their tenures in government, of having 鈥渂lood on their hands鈥 over long-term cuts to services.
London Councils, which acts as the collective voice for London鈥檚 32 local authorities and the City of London Corporation, previously said that outer suburbs face 鈥渁 particularly tough outlook鈥.
The cross-party group said boroughs such as Bromley are among 鈥渢he lowest funded per capita in the country鈥, with growing populations who are becoming more deprived.
Bromley鈥檚 budget for 2025/26 already includes 拢148 per head of population in grant funding from Whitehall, significantly lower than the London average of 拢382.
Mr Smith said: 鈥淭here鈥檚 no upside anyone can see. There鈥檚 widespread agreement across all persuasions that the current system is broken. We repeat cost-cutting exercises every year to see what we can try and drag it out if it. Everyone is doing their best to try and keep costs down鈥 but there is absolutely nothing more to cut. The direction of travel is undeniable.鈥
In February, The Standard revealed that seven London councils applied for emergency government cash this year to balance the books, up from two in 2024.
Local government minister Jim McMahon claims Labour鈥檚 new formula would hand “around 拢2billion of funding to the places and communities that need it most”.
“The current funding system is a decade old and reinforces the divide between deprived places and the rest of the country,” he added.
Ms Rayner, standing in for Sir Keir Starmer at Prime Minister鈥檚 Questions on June 25, responded: 鈥淲e are fixing the foundations of local government after 14 years of austerity that was inflicted with the aiding and abetting of her party.鈥