Leader Barry Rawlings said financial pressures were particularly bad in the outer London ‘care home belt’ reports David Floyd

Barry Rawlings pictured outside Hendon Town Hall (credit Barnet Council)

Barnet Council has confirmed that it has asked the government for a massive bailout to balance its budget.

The council told Barnet Post that an application for £59million of Exceptional Financial Support for 2025/26 had been made on 13th December following initial talks with the government in November.

Explaining the reasons for the move, the council’s Labour leader Barry Rawlings said that the authority had been: “caught in the perfect storm caused by a combination of government cuts that have more than halved our budget since 2010, sky-rocketing inflation-driven costs over the last three years, and increasing demand for services we have a legal duty to provide”.

Rawlings – who temporarily holds the council’s financial portfolio after the removal of former cabinet member Ammar Naqvi earlier this month – added that: “Councils of all political complexions have been highlighting this crisis and dozens have already applied for Exceptional Financial Support, but the pressures are particularly acute in the ‘care home belt’ of outer London, where demand for social care is especially high.”

“In addition, financial commitments that we inherited have also led to the need to make difficult choices now without the cushion of large reserves to fall back on.

Exceptional Financial Support (ESF) is a mechanism set up by central government in 2020 to provide councils with: “assistance to manage financial pressures that they considered unmanageable”. The aim is to avoid a situation where a council is forced to issue a Section 114 notice to say that it is not able to set a legal budget. This is similar to going bankrupt and often results in central government stepping in to help run the authority.

The Ministry of Housing, Communities and Local Government (MHCLG) provided ESF to 19 local authorities for the current (2024/25) financial year but the number receiving support this year is expected to be significantly higher as large numbers of councils experience similar challenges to those faced in Barnet.

Barnet joins neighbouring boroughs in making requests to MHCLG in recent months. Haringey Council made a request for £37million in December, while Enfield, which had previously said it would not need EFS in 2025/26, last week made a request to access £30million.

Previously, in his New Year message, Cllr Rawlings said the council was expecting to have a budget gap of £52million for 2025/26, even assuming that the near maximum 4.98% tax rise proposed in the council’s budget consultation, is implemented, along with significant spending cuts.

“They understand the pressures the council is facing”

Now, describing his administration’s approach to the situation, he told Barnet Post: “Our conversations with government have been very constructive. They understand the pressures councils are facing and have engaged with us positively.

“The request for financial support is not a decision we have taken lightly. The funding would give us the space to work through some of the unprecedented pressures the council is facing and to implement the changes we want to make to put us on a firmer financial footing.”

Conservative group leader, Cllr Peter Zinkin, was scathing in his response to the move. He told Barnet Post: “The key issue is that they are doing nothing to solve the fundamental problem and are lying about the impact of the cost savings. The need for the central government’s help is AFTER all of the cost savings, and it is because they don’t know how to bridge the gap, they are just irresponsibly storing up problems for the future.”

The council says that the request is for a maximum of £59million and this could potentially be reduced as part of the budget process.

A council spokesperson explained that: “The amount requested is subject to change as we finalise our budget over the next few weeks. At the time of application we made a request of up to £59m over 2025/26.”

They added: “MHCLG has advised that councils will be informed by the end of Feb 2025 if their application has been successful.

While plans to close the budget in the event the government does not step in are currently unclear, the spokesperson did offer a hint of optimism: “To date, no council that has applied for EFS has been refused.”

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