Bexley’s Cabinet approved a plan last night setting out how it will pay for services over the next five years as it revealed a forecast for a budget gap of £5m for the future.

The Medium Term Financial Strategy was approved at Public Cabinet last night as the council revealed that due to limited support from the government, there is a budget forecast of a gap that will be £12m by 2021/22.

The strategy covers annual day-to-day spending on services and sets out £310m of longer-term investments in improvements.

Plans for investment in the borough include £120m investment on development schemes to provide housing in the borough and to generate rental income for the Council, £18m on the regeneration of Erith, £12m on the borough’s infrastructure, environment and leisure facilities and £36m on Bexley’s roads and transport infrastructure.

Councillor Don Massey, deputy leader of the council, said: “Our plans to make the borough an even better place to live are based on a firm foundation of careful financial planning.

“We have had to make big adjustments because of changes to our funding over recent years, but we have managed this by improving our efficiency and transforming services to ensure we are spending our money on the things that make most difference to people’s lives.”

Bexley’s core government grant, which was £21m last year, will reduce to just £1.4m by 2021.

Other grants the council receive are also reducing in value.

A spokesman for Bexley Council said: “This means that the amount the Council can spend is increasingly being dictated by the income it raises locally from business rates, council tax, fees and charges.

“Economic growth is already happening in the borough and new investment and developments in the borough are having a positive impact - increasing income from council tax, business rates and rental and investment income.

“The more commercial approach recently adopted also means the council is increasing the income it raises through selling services.”

Plans to address the budget gap will be brought forward in the autumn as part of next year’s budget making process.