Enfield Council is set to deliberate on strategies for debt reduction and bolstering risk reserves, following a recommendation from its local auditor, Grant Thornton. The council's debt, which stood at £1.286 billion at the end of the 2024/25 financial year and is projected to reach £1.5 billion by the end of 2025/26, has prompted concerns about financial stability. The council is aiming to address the debt in part by selling parcels of land to developers under the Meridian Water project, according to the Public reports pack 12th-Nov-2025 19.00 Council.
The recommendation was presented at the Council meeting on 12 November 2025, urging the council to address its debt. The auditor's report highlighted the importance of managing debts related to subsidiary undertakings, including investments in energy projects, private house purchases, and the Meridian Water project. Specifically, the debt includes £51.715 million related to loans for energy projects through Energetik Ltd, £141.902 million for private house purchases through Housing Gateway Ltd, and £379.8 million capital financing requirement for the Meridian Water project, according to the Local Auditor Recommendation report.
Grant Thornton's report noted that the council's risk reserves were low, and that the 2025/26 budget relied on £18.1 million of forecast savings and £5 million of forecast reserves use. The report also notes that the council had prepared a balanced budget for 2025/26, but the budget relied on £18.1 million of forecast savings and £5 million of forecast reserves use.
The auditor recommended that the council should:
- Agree and action options for debt reduction and reductions to the annual cost of servicing debt, being mindful of debts related to subsidiary undertakings for investing in energy projects (£51.715 million), private house purchases (£141.902 million), and the Meridian Water project (£379.8 million capital financing requirement).
- Progress actions to rebuild risk reserves to the council's minimum threshold target of £43 million, prioritising recurring actions to maintain reserves at their minimum level without future recourse to exceptional financial support, and explore options for further rebuilding of risk reserves to move towards their target level of £83 million from the end of 2026/27.
The council was also asked to note the treasury management mid-year update, which included the borrowing and investments position as at 30th September 2025. The Treasury Q2 Cabinet 12th Nov - Council v2 report noted that of the £419.1m of capital expenditure forecast to be spent in 2025/26, £96.6m (23%) is funded by borrowing, £207.6m (50%) from grants and other non-borrowing sources with the remaining £114.9m (27%) through finance lease arrangements.
The estimated overall cost of debt to the Council's General Fund for 2025/26 is £31.4m made up of net interest and other charges £12.0m and Minimum Revenue Provision (MRP) £19.4m.
The accumulated gross external debt (excluding PFI and finance lease obligations) as at 31st March 2025, was £1.286bn reducing to £1.261bn as at 30th September as a result of debt repayments. This is estimated to reach £1.453bn at the end of the financial year.
Investment income is forecast to be £4.3m (averaging 4.15%) in line with budget. The council invests short-term surplus funds with other local authorities in accordance with government guidance and strict risk management procedures, according to the Treasury Q2 Cabinet 12th Nov - Council v2 report.
The report also noted that the Council is one of seven who share responsibility for the servicing and repayment of the North London Waste Authority (NLWA) debt. The Council is estimating to pay £14.1m to NLWA contributions in 2025/26, according to the Treasury Q2 Cabinet 12th Nov - Council v2 report.
