Council tax will be frozen for people living in Kensington and Chelsea , it has been announced.

The decision was made at a council Cabinet meeting on February 11, with the Conservative administration saying it will still continue providing “broad range of good quality services for local residents”.

It means a Band D taxpayer will pay £766.80. However, it will result in a hit on the council’s reserve, which is forecast to be depleted by £30 million this year, and £100m with the next four years.

Labour opposition leader Robert Atkinson argued the administration must do more.

The council joins neighbouring Labour-run Hammersmith and Fulham in freezing rates, and says it is because of a close working relationship with its neighbour that it is able to keep council tax as it is.

A spokesperson said: “By sharing the management of services with its municipal neighbours, Kensington and Chelsea has saved millions that would otherwise have had to be found via service reduction or increases in charges.

"Sharing with Westminster and Hammersmith and Fulham is expected to deliver savings of nearly £14 million in 2016/17."

“This strategy of sharing, saving and good stewardship of its assets will enable the Council to cover some £13m of grant losses and cost pressures in 2016-17 and still set a zero council tax increase for the seventh year in a row.

"Kensington and Chelsea’s council tax will therefore remain amongst the very lowest in the country."

K&C leader Nick Paget-Brown: "Residents well served by this council"

Other savings and efficiencies have also resulted in higher income for the borough, with the council’s property estate’s annual income rising from £3.8 million in 2010-11 to £10.5m.

It will help allow the council to carry on its programme of capital investment, which will also be financed from through reserves built up by the council.

'Our good work will continue'

The programme is designed to renew local infrastructure, particularly schools and, in due course, to build more homes in the borough.

But it will result in reserves dropping from £197 million in 2015-16 to £167 million in 2016-17 and £97 million in 2019-20.

Council leader Nick Paget-Brown welcomed the news. He said: “We believe our residents have been well served by this Council. We have kept council tax down by making the council more efficient and we are still building for the future by renewing and expanding schools.

“Not only has the Council maintained services that many other councils no longer offer such as help to older people with ‘moderate’ care needs, we have also improved our libraries, our parks and sports facilities.

“We will continue to maintain and develop services by improving the ways in which we spend taxpayers’ money, manage staff and use our buildings.”

'Stop acting like a bank'

But Cllr Atkinson urged the administration to stop “acting like a bank and hoarding away the public’s money”. He said: “The council should be willing to provide more and better services, especially for older people’s services. We are horrified at the money that continues to go into council reserves.

“If we were running the council we would run things very differently."

The budget will now go before the full council at a meeting on March 2. It can be read in full on the council website .