Barnet Council's finances for the third quarter of the 2025/26 financial year are projected to be balanced, with contingency funds and reserves being utilised.
The Overview and Scrutiny Committee heard on Tuesday, March 24, 2026, that the council is forecasting a balanced position at year-end after utilising contingency funds and topping up reserves. This positive outlook is attributed to achieving 96.5% of planned savings, a notable improvement from the historic average of 85%.
Councillor Simon Radford, Cabinet Member for Financial Sustainability, presented the Q3 financial forecast, highlighting the council's resilience to macro-economic volatility through tight budget management and contingency planning. He noted concerns about rising borrowing costs linked to inflation expectations and increased input costs for materials. So there is definitely issues around the macro environment that is both outside of our control, outside the government's control, but will certainly impact us,
he stated. While higher interest rates may marginally increase investment portfolio returns, the primary impact is on the cost side of the budget. it's only by being extremely rigid and hard in how we press on our savings and our budget that allows us to withstand and have a certain amount of resilience to things which might be outside of our control.
The council is utilising £2.315 million from its contingency funds, leaving a projected balance of £2.315 million at year-end from the original £37.5 million budget. Contingency use has improved by £2.163 million from the Q2 forecast, largely due to reduced parking contingency forecasts. The Housing Revenue Account (HRA) is forecasting a deficit of £4.7 million, with a remaining carry-forward reserve of £6.6 million.
The achievement of 96.5% of planned savings represents a significant increase from the historic average of 85%. This improvement is largely driven by additional savings from progression reviews, which support individuals with learning disabilities and mental health conditions to increase their independence. As individuals progress, they may move to less intensive and lower-cost forms of support while still receiving appropriate care.
However, not all areas met their savings targets. In Children's Family Services, a shortfall of £1.83 million is anticipated, relating to health and Local Government and School Funding Council (DSG) contributions towards high-cost complex placements, despite additional education funding of £0.600 million to offset some costs.
Further details on the council's financial forecast can be found in the Chief Finance Officer Report - 202526 Q3 Financial Forecast and 202526 Budget Management [https://barnet.moderngov.co.uk/documents/s94701/Chief%20Finance%20Officer%20Report%20-%20202526%20Q3%20Financial%20Forecast%20and%20202526%20Budget%20Management.pdf]. The meeting agenda is available at [https://barnet.moderngov.co.uk/documents/g11851/Agenda%20frontsheet%2024th-Mar-2026%2019.00%20Overview%20and%20Scrutiny%20Committee.pdf?T=0].