Labour says spending is “under control” but admits it will be “very challenging” to get to a position where it doesn’t require further borrowing reports David Floyd

Hendon Town Hall and (inset) finance chief Cllr Simon Radford

Barnet Conservatives have called on the borough’s ruling Labour administration to come clean about their tax plans claiming that council’s current strategy represents “financial suicide on a breathtaking scale”.

The Conservatives say the council’s budget for the next financial year, due to be presented by cabinet member for finance, Simon Radford, at tonight’s cabinet meeting fails to even begin to tackle a financial situation that will see the borough face ever growing deficits leading to massive cuts in services.

In a statement issued today they claim: “Barnet Labour’s final budget has exposed a jaw-dropping crisis in Barnet, one so dire that the north London borough is staring at deficits topping £200 million a year, more than a quarter of its entire core income by the end of the plan period.”

In the papers for the meeting, Cllr Radford confirms that the council will seek £79.3million in Exceptional Financial Support (EFS) in order to balance its budget for 2026/27. EFS means that the government would allow the council to borrow money or use income from asset sales to plug the budget gap. Last year, the council required £55.7million of EFS to balance its budget for the current financial year.

30% tax hike wouldn’t be enough to ‘close the black hole’ say Tories

However, despite this revelation, Barnet Conservatives believe that Labour is not being open about the full scale of the problem facing the council. They say that while central government policies on council funding suggest that the council may be expected to increase council tax by 30% over the next three years, even this would not be enough to stabilise the situation.

They add: “The bombshell medium term financial strategy, buried in the budget council papers, lays bare the horrifying truth: escalating shortfalls year after year, with no improvement in any year and no end in sight.

“Even with savage cuts to non-statutory services and that massive tax bombshell, the black hole still wouldn’t fully close.

Referring to the the council is making its second request for ‘exceptional’ support in two years, and for an increased amount compared to last year, they continue: “If the government pulls the plug on emergency borrowing, Barnet’s finance chief, the Section 151 Officer, would have no choice but to issue a Section 114 notice, the nuclear option that forces a council to stop all non-essential spending by law. Libraries, leisure centres, street cleaning, children centres– everything non-statutory would be slashed.

“The impact on local families would be devastating.”

Barnet Post contacted Barnet Labour for a response to the Conservatives’ claims, focusing particularly on the claim that it would be necessary to raise council tax well above 5% per year that is allowed without either holding a local referendum or receiving special permission from the government.

Asked whether they had any plans to increase council tax by more than 5% in any year over the next five years, a Barnet Labour spokesperson said: “Our budget report for cabinet has below 5% increases factored into the medium term financial strategy over the next five years. Barnet Labour has also kept council tax increases below the 5% maximum legal level allowed for the last three years.”

Conservatives ‘left the cupboard bare’ say Labour

Asked how, without a major increase in council tax, Barnet Labour planned to bring the council’s spending under control, the spokesperson responded: “The council’s current in-year spending is under control. Barnet’s Labour council has worked extremely hard to counter the damage caused to the council’s finances after decades of austerity under the Conservatives which left the cupboard bare, and the disastrous Liz Truss mini budget that sent inflation, interest rates and demand for services skyrocketing in September 2022.

“We have gone from a £23m overspend in 2023 following the mini budget to keeping within budget in 2025/26. Our transformation programme has brought adult social care – the largest spending department in the council and a service that has overspent every year for decades – from a £20m overspend two years ago, to within budget this year.

“Going forward the council’s problem is not in-year spending, but future demand pressures in statutory services. Our plan to tackle this includes work to improve forecasting of demand pressures, a council-wide systematic approach to prevention, a focus on innovation – particularly in the area of digital, AI and technology, and continued efforts to implement new efficiencies. This work is set out in detail in the Cabinet report.”

Asked in what year Barnet Labour envisages that the council will no longer require EFS, the spokesperson said: “This is difficult to predict as it depends on so many variables including the economy, future demand for services the council has a legal duty to provide, and our funding from government beyond the current three-year settlement – the first multi-year settlement for local government in decades.

“However, positive signs that we are moving in the right direction include our success at bringing in-year spending under control, inflation and interest rates have been coming down, and we had a further £2m uplift to our funding from government to add to the additional £37m announced in December.

“What we can say is that ‘Exceptional Financial Support’ in local government terms is no longer ‘exceptional’ as even more councils are having to request it. This year 35 councils have been granted EFS, up from around 29 last year.

“This is evidence that the problem is structural across the sector, and the government recognises this in their EFS announcement this week. Nevertheless, we believe we need a goal to work towards, so our Innovation Approach sets out a high-level aim to reach financial sustainability within three years, with a balanced budget that is not reliant on EFS. This is a very challenging goal, but we are now working towards it.”

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