Barnet Council is facing a potential £9m funding reduction over the next three years as London Councils transitions to a new funding model. The changes could see Barnet lose £400k in funding next year alone.
The stark warning emerged during a meeting of the Overview and Scrutiny Committee on Thursday, where councillors scrutinised the Business Planning 2026-2031 Medium Term Financial Strategy and 2025-26 Budget Management. Council Leader, Councillor Barry Rawlings, acknowledged the challenges, stating that since 2010, the council has faced increasing financial strain, which has been further exacerbated by recent economic events.
The report presented to the committee indicated that modelling by London Councils suggests Barnet could face a loss of nearly £9m after the transition. This figure is based on the original proposals, and Councillor Rawlings noted that lobbying efforts have been underway to mitigate the impact. While the specifics of the new funding model and how it differs from the previous one remain unclear, the Business Planning 2026-2031 Medium Term Financial Strategy outlines the potential financial impact on the borough.
Despite the looming funding gap, the council is exploring various strategies to achieve a balanced budget for 2026/27, including savings and income generation proposals. Councillor Simon Radford, Cabinet Member for Financial Sustainability, highlighted the engagement of an independent improvement partner, People2, to identify further opportunities for reducing service demand, making savings, improving efficiency, and increasing income generation. The council has already identified £9.919m of savings for 2026/27 in collaboration with People2. A detailed breakdown of these savings and income generation proposals can be found in Appendix B of the Business Planning report.
Councillor Peter Zinkin, Leader of the Conservative Group, raised concerns about the council's reliance on Exceptional Financial Support (EFS) from the government, characterising it as a loan that must be repaid. He also questioned the council's plan to address the structural deficit, given that savings alone may not be sufficient. Councillor Rawlings responded that the council is working to increase income and improve productivity, including through the use of AI and technology. He also emphasised the need for longer-term demand measures and continued lobbying on strategic issues.
Councillor Richard Cornelius questioned whether the council was bearing more than its rightful share of problems in London, and what lobbying was being done to address this. Councillor Rawlings responded that the Cabinet Members involved could answer a lot of that.
During the meeting, Councillor Emma Wiesel, the Chair, invited the Chairs and Vice Chairs of the Overview and Scrutiny subcommittees, which focus on adults and health and on children and education, to ensure proper scrutiny of those areas.
The Overview and Scrutiny Committee is expected to continue its review of the Medium Term Financial Strategy and make recommendations to the Cabinet in February 2026, after the Provisional Local Government Finance Settlement is announced.
