Enfield Council is projecting a significant budget shortfall of £63.4 million by the period spanning 2026/27 to 2029/30, according to a recent financial update presented to the Overview & Scrutiny Committee. The report, available on the council's governance website, was delivered by Neil Goffard, Head of Financial Strategy, outlined the council's financial resilience amidst a continually challenging economic environment. The 2025/26 net revenue budget is currently set at £353.7 million.

The council highlighted its history of fiscal responsibility, having delivered over £261 million in savings and income generation since 2010/11. To mitigate immediate pressures, Enfield Council has been approved to use £30 million in capital receipts through an Exceptional Financial Support application, safeguarding the council's reserves. The £30 million in capital receipts will be applied to the most significant pressures. The OSC Finance Update does not specify which assets will be sold or leveraged to generate these receipts.

Key Financial Challenges:

  • General Fund Revenue: A £7.5 million overspend is anticipated, primarily due to increased demand in adult social care, children's services, and temporary accommodation. The increased demand in these areas is described as 'sustained demand,' suggesting these factors are not expected to be temporary. Strategies are being implemented to manage demand, including demand management, cost control panels, regional collaboration, a National Placement Policy and Temporary Accommodation strategy to address homelessness, placement sufficiency strategy, care leaver support, and capital investment to replace high-cost vehicles. The strategy to manage homelessness pressures includes prevention and early intervention activity, contract reviews and workforce planning.
  • Housing Revenue Account (HRA): An additional £1.5 million expenditure is forecast for repairs related to Awaab's Law, to be funded from HRA reserves. To mitigate long-term implications, the council is undertaking a transformation of the repairs service to deliver annual savings, ensuring that in-year increases to the budget do not result in a long-term negative impact on the operating margin.
  • Dedicated Schools Grant (DSG): A £4.5 million in-year overspend is projected, leading to a £21.9 million deficit. Actions being taken to address this deficit include increasing in-borough provision through additional resources within schools and reviewing contracts and service delivery models. The OSC Finance Update does not specify the impact these actions will have on schools and students.

The report also addressed broader financial challenges facing local governments, particularly concerning deficits within the high-needs block of their DSG. Enfield's cumulative DSG deficit was £17.4 million at the start of the 2025/26 financial year.

The government's proposed Fair Funding 2.0 review could potentially benefit Enfield. Early modelling suggests that Enfield may benefit from the proposed changes in the Fair Funding 2.0 review. However, there is no certainty until the government publishes the results of the consultation and the provisional local government finance settlement, which is due in December. The OSC Finance Update notes that the review proposes a new formula to reflect actual need, with almost full implementation from 2028/29.

The Overview & Scrutiny Committee is scheduled to further discuss the budget as part of the formal budget process.