Barnet Council faces £198m budget deficit by 2029/30
Barnet Council is confronting a projected budget deficit of £198 million by the financial year 2029/30, according to a financial sustainability plan presented to the council's Cabinet. The plan outlines a strategy to balance the budget by March 2029 and establish a sustainable capability to manage future financial challenges.
Key strategies to address this gap include prevention, progression, productivity, service and asset review, and income generation. The council's medium-term financial strategy highlights a significant budget gap, projected to reach £113.5 million in 2027/28. This is driven by increasing demand and costs in social care services and homelessness, as well as the financing costs of Exceptional Financial Support (EFS). The shortfall is also exacerbated by housing benefit rates not being updated since 2011.
Councillor Simon Radford, Cabinet Member for Financial Sustainability, presented the plan, stating that expenditure is growing faster than resources. He outlined that income growth through council tax increases and traditional savings programmes are necessary but not sufficient to close the gap long-term. The financing costs for EFS are projected to be substantial, reaching £9,552,000 in 2027/28, £13,210,000 in 2028/29, and £17,377,000 in 2029/30. EFS will be required to achieve a balanced budget for 2027/28, with any borrowing incurring revenue implications in the form of interest payments and Minimum Revenue Provision.
Councillor Peter Zinkin, Leader of the Conservative Group, raised concerns about the council's ability to implement the plan effectively, highlighting a historical tendency towards analysis over action. He also stressed the importance of transparently communicating the scale of the financial problem and potential solutions, particularly council tax increases, to residents. Councillor Zinkin mentioned an £8 a week increase for Band D properties, which equates to approximately £400 a year. Councillor Radford, however, noted a modelled increase of approximately £70 million per year over the period, equating to about £8.42 per week for Band D properties.
Councillor Radford acknowledged these concerns, emphasizing the council's commitment to rigorous financial governance and a whole-organisation approach to delivery. The plan's 'prevention' strategy focuses on reducing the need for ongoing council services, while 'progression' aims to shorten the duration and intensity of support for those already receiving services. These initiatives are part of a larger portfolio targeting significant financial benefits. The Cabinet discussed the plan, its governance arrangements, and delegated authority to the Chief Executive and Cabinet Member for Financial Sustainability to make final amendments. The plan is supported by 'sound financial governance' and overseen through established council structures, with quarterly updates reported to Cabinet.
The council is seeking permission from the government to increase council tax above referendum limits, a move currently under discussion with the Ministry of Housing, Communities and Local Government (MHCLG). If permission is denied, Councillor Radford stated that it 'will mean more difficult decisions, but there will be a balanced budget.'
Councillor Zinkin also advocated for the inclusion of scenario modelling, particularly regarding council tax increases, to better illustrate the impact on households. He also suggested exploring additional revenue generation opportunities and expanding mechanisms for frontline staff to submit innovation ideas. The 'Service and Asset Review' aims to ensure the council's resources are focused where they deliver the greatest impact, potentially involving disposals and reducing holding costs to generate capital receipts that lower borrowing costs. However, specific types of assets under review are not detailed.