Barnet Council is considering a 2.98% increase in general council tax for the 2026/27 financial year. The proposal was discussed at a meeting of the Overview and Scrutiny Committee on Thursday, December 11th, 2025, as part of a broader review of the council's Medium Term Financial Strategy (MTFS).

The proposed increase, which is below the legal maximum of 5%, is part of a package of measures aimed at addressing significant financial challenges facing the council. These challenges include rising demand for statutory services, such as social care and temporary accommodation, coupled with increasing costs due to inflation and interest rates.

Specifically, the council is facing rising demand for services such as social care and temporary accommodation. The additional service pressures for temporary accommodation (including Housing Benefit Subsidy) are projected to be £11.305m in 2026/27, according to the Annex 1 report to the Cabinet on 9 December 2025.

Councillor Simon Radford, Cabinet Member for Financial Sustainability, acknowledged the financial pressures but highlighted the council's efforts to manage spending effectively. He noted that a quarter of London boroughs are currently receiving Exceptional Financial Support (EFS), suggesting a structural funding problem across local government.

With the demand for statutory services projected to increase, it's likely that we'll need to apply for EFS again next year, Councillor Radford said. He also mentioned that the government's recent announcement on funding reform had taken on board some of the council's concerns.

The council is also proposing a 2.00% Social Care Precept to help fund pressures in social care. The Business Planning 2026-2031 Medium Term Financial Strategy and 2025-26 Budget Management report details savings and income generation proposals, as well as a breakdown of service pressures and demand-forecasting methodologies. To offset the financial challenges, the MTFS includes savings and income generation proposals detailed in Appendix B of the report. The savings identified for 2026/27 total £9.919m. Examples include maximising income from additional client income based on demographic growth and service optimisation in Adult Social Care, Street Scene EV Charge Points and Commercial Services Diversification in the Environment sector, and service redesign, change management and digitisation of the Housing Options Service for Growth.

Councillor Barry Rawlings, Leader of the Council, pointed to the impact of previous government policies on council finances. He stressed the importance of investing in prevention and productivity, including the use of AI and technology, to manage rising demand. He also noted that modelling undertaken by London Councils showed that, under the original proposals, after transition, Barnet could lose nearly £9m of funding over the next 3 years (£400k next year).

Councillor Rawlings noted that in adults social care, Magic Notes is good, as an AI system gives more time. He also mentioned that children's services are now using AI and that it is helping them and giving them more time. The Cabinet Member for Financial Sustainability, Councillor Radford, also mentioned digital transformation as an important theme.

The Overview and Scrutiny Committee is expected to provide feedback on the budget proposals, which will be considered by the Cabinet in February 2026 before being presented to the full Council for approval in March.

The council is encouraging residents to participate in the budget consultation, which will launch in the week commencing December 15th, 2025. The consultation will provide an opportunity for residents to share their views on the proposed council tax increase and other budget proposals.

As part of the consultation, the council will explain the implications of a government policy that assumes a national average council tax level, and the potential impact on Barnet's funding if it remains below that average. Councillor Peter Zinkin raised concerns about this issue, arguing that the council's current council tax level takes money away from it.

The Agenda frontsheet 11th-Dec-2025 19.00 Overview and Scrutiny Committee provides further details on the meeting and agenda items.

While the meeting transcript does not explicitly list the specific criteria and requirements for receiving Exceptional Financial Support (EFS), Councillor Radford indicated that MHCLG has not raised concerns about Barnet's initial application, and that they will do a rapid review to check the robustness of the application. He also noted that Barnet has a good Ofsted, a good CQC, a C1 rating in social housing, and a value for money report from Grant Thornton with no statutory recommendations. Councillor Rawlings stated that the government is more likely to give money to support councils that are well-run and have a plan to use the money well.