Barnet Council has formally accepted all 18 recommendations from a critical financial review commissioned by the Ministry for Housing, Communities and Local Government (MHCLG).
The review, conducted by CIPFA, highlighted significant financial sustainability risks for the council, including a widening structural deficit projected to reach £79.3 million in 2026-27 and £243.5 million by 2030-31, and a substantial reliance on Exceptional Financial Support (EFS).
Beyond these headline figures, CIPFA identified a raft of other concerns, including weak savings delivery, a lack of delivery discipline in transformation projects, and deteriorating Housing Revenue Account (HRA) viability coupled with high borrowing levels. The council's low reserve levels further exacerbate these risks, leaving it with insufficient financial resilience to absorb future shocks.
Councillor Simon Radford, Cabinet Member for Financial Sustainability, presented the findings to the Cabinet on Tuesday 15 September 2026. He stated that while the review identified areas for improvement, the council accepted all recommendations, noting that much work had already been undertaken on many of them. For instance, the council has strengthened first-line ownership of governance and financial risk, improved audit and scrutiny effectiveness, and is developing a more realistic savings plan. Targeted technical training and improved financial systems controls are also being implemented to strengthen the finance function.
The recommendations focus on enhancing financial processes, improving financial sustainability and risk management, driving service reform, and strengthening governance, culture, and leadership. Specific service reforms being considered include those in Adult Social Care, Children's Services, and Temporary Accommodation, aiming to manage demand, improve placement sufficiency, and reduce reliance on high-cost external provision. Waste services and procurement processes are also subject to reform.
Failure to effectively implement these recommendations could lead to continued reliance on EFS, escalating deficits, and sharply rising debt costs. The council's financial resilience would remain weak, and the HRA could become unviable. Poor asset stewardship, missed capital receipt opportunities, and financially unsustainable capital commitments are also potential consequences. Inadequate challenge and control over council exposure, alongside reactive risk management, could necessitate external intervention.
A plan for financial sustainability, detailing how the council intends to implement these recommendations, will be presented to the October Cabinet meeting. This plan is expected to be very detailed
and will outline how the council will be doing things differently in six months' time. Future updates on progress will be included in the Chief Finance Officer's quarterly reports.
The timeline for the full implementation of the 18 recommendations varies, with key milestones set for September 2026, October 2026, December 2026, and March 2027. These include developing a deliverable savings plan, strengthening business case discipline, prioritising high-impact reforms, establishing a risk-based reserves strategy, and embedding strategic commissioning.
Cabinet authorised the Chief Executive and Section 151 Officer, in consultation with Councillor Radford, to submit progress reports to MHCLG at the end of September 2026 and thereafter as requested by the Ministry. The council's current reliance on EFS is substantial, with MHCLG approving up to £55.7m in 2025/26 and up to £79.6m for 2026/27. The council's assumption that EFS is temporary is not currently supported by a credible pathway to a balanced budget.
Further risks identified include underdeveloped asset management and disposal strategies, capital programme risks due to scale and rising borrowing costs, and weaknesses in governance over companies and investments, where over £400 million of council exposure is inadequately controlled. Reactive procurement and uneven procurement capacity also contribute to financial pressures, particularly in high-cost services. The council's strategic direction is not yet clearly anchored in financial sustainability, and there is a risk that political transition could delay crucial decision-making. Inconsistent depth of challenge in governance and scrutiny, coupled with a cautious, consensus-led culture, could hinder timely and decisive action.
The council risks remaining in a high-cost, average-outcomes position, particularly in adult social care, children's services, and temporary accommodation, where demand continues to outpace transformation delivery. Weaknesses in financial systems, technical accounting capability, and operational controls also create a risk of inaccurate financial reporting and delayed identification of pressures.
