Barry Rawlings speaks to Grace Howarth, Local Democracy Reporter, as soaring spending on social care leads to “difficult decisions” to make the numbers add up in 2024/25
The leader of Barnet Council says he is “optimistic” and “ambitious” about the authority’s future after confirming that it would set a balanced budget for 2024/25.
Following a year of signficant financial pressure, mainly due to overspending on adult’s and children’s social services, the council’s finance team has now closed a projected budget gap which at one point hit £45m before tax rises and savings were taken into account.
This feat was not achieved without making some “difficult decisions” according to council leader Barry Rawlings, who spoke to the Local Democracy Reporting Service today (Tuesday 31st).
Cllr Rawlings said the council had set out on a “difficult path” to find savings and implement the cuts needed to balance next year’s budget, which it is legally required to do.
Council tax will be rising by a total of 4.98%, comprising a 2.98% increase in the core rate, plus another 2% rise in the precept used to fund adult social care. The local authority is also planning rent increases of 7.7% for all council-owned homes.
Cllr Rawlings explained that the long-term aim was to try to “find more of our own income” that would make the council’s finances more sustainable in future.
He said: “It is a difficult situation, I think Barnet is in a relatively good position, it might not feel like that when the council tax bills come through, but it’s about investing in the future.
“If you look across councils, [almost] everywhere in London has overspent on adult’s social care, I think it’s 31 out of 33 boroughs, but those services are a statutory requirement. As a council you can’t walk away, you have to find the money, so yes there are overspends.”
Cllr Rawlings explained why the landscape for councils generally was tough, with several authorities elsewhere recently issuing Section 114 notices, or effective bankruptcy, following “14 years of austerity”.
He said: “That’s not making excuses, these are universal things, and we have had 14 years of austerity. I don’t think any local government hasn’t been affected by cuts.”
The council leader pointed out that the government’s Revenue Support Grant, the core funding given by the Treasury to councils, hadn’t risen with inflation. Meanwhile, local government had been “given more responsibility without the funding to deal with it”. He added that Conservative-run councils were impacted by the same issues.
Breaking down this year’s budget overspend, Cllr Rawlings said the “latest figure” that they were still “trying to cut down” was £17m. He said this was even after there had been in-year reductions, with the projected overspend previously standing as high as £26m.
Cllr Rawlings said the “main drivers” were higher than expected demand for adult’s and children’s social care and that both were “to a certain extent the after-effects of the pandemic”.
He also listed Barnet’s ageing population, the number of children who are now home-educated, and an increase in children being diagnosed with mental health issues as some of the reasons behind the rising spending.
“You’re so constricted on what you can do, and you have statutory duties,” said Cllr Rawlings.
He added that the £17m overspend is likely to be “paid out of reserves” and said: “Reserves were impacted more than expected compared to the beginning of the year, it’s a year where interest rates have gone up a lot, [and] inflation has gone up more than expected.
“We had a bizarre and disruptive mini-budget [under former prime minister Liz Truss, who proposed extensive tax cuts in late 2022] – it’s payment for national mismanagement of the economy and it’s local residents and councils who have to pay for that.”
Speaking on the money still owed to the council by the NHS, Cllr Rawlings said the latest figure owed was approximately £23m.
By 2026 the council plans to bring all services back under its own control, after transferring them from long-running outsourcing partner Capita. This includes customer care and IT services.
Speaking on the decision, Cllr Rawlings said: “Barnet Council has a responsibility to the people of Barnet. Capita is a private firm and I’m not blaming them for this, their duty is to provide for their shareholders.”
He said bringing services in-house gave them more “flexibility” and “ability to plan long-term” and added: “I think in the long-run, the flexibility means it will save money.”
Even with the tough budget-setting process this year, some new investments in the borough are also included.
Speaking on planned infrastructure spending, Cllr Rawlings said the council was investing £97m into improving roads and pavements over the next five years, after years of “underfunding”. He said it wasn’t just a case of “patching up” roads but that they needed “stripping off and relaying”.
Summarising his thoughts around the decisions made to close the 2024/25 budget gap, Cllr Rawlings said: “It’s not a case of making people happy but when you look at the wide range of services we provide, even ones that are hidden away, we think the council is good value for money.”