Barnet Council's budget gap set to become highest in London, new analysis shows

The local authority is projected to have a budget deficit of nearly £113.5million by the end of the 2027/28 financial year, reports Joe Ives, Local Democracy Reporter

Barnet Council's Colindale office — Barnet Council’s Colindale office

Barnet Council is on track to have the largest budget gap in London by 2028, BBC analysis has revealed.

The local authority is projected to have a budget deficit of nearly £113.5million by the end of the 2027/28 financial year – the second largest of any council in England.

The findings, released today (Thursday 20th), come as part of research by the BBC’s Shared Data Unit looking into town hall finances in the UK.

Across England only Hampshire County Council, with an expected deficit of nearly £180m, is expected to be in a worse position than Barnet by the end of 2027/28.

Nevertheless, the North London council insists that it is “a tightly run ship” navigating its way through a “perfect storm” created by years of government funding cuts and soaring costs for essential services such as temporary accommodation and adult social care.

The scale of the problem potentially facing the local authority comes despite £9.42m of planned savings – equating to £23.25 per Barnet resident – being made for the 2026/27 financial year, which started in April.

The BBC’s analysis found that over eleven times this amount would have to be saved over the next two years to plug the financial gap. The projected shortfall per resident by 2027/28 is £280.17.

At the same time, the overall band D council tax bill went up nearly £77 this year, taking the annual fee to over £1,600. This hike came despite the local authority receiving substantial ‘exceptional financial support’ (EFS) from the government.

The council needed £55.7m of EFS to balance the books for 2025/26 and a further £79.3m to do so in 2026/27. EFS allows councils to treat some day-to-day spending as longer-term capital expenditure, which is usually funded through borrowing.

Recent analysis carried out by KPMG for neighbouring Haringey Council found that, at current rates, each £1m of EFS borrowing could cost town halls “approximately” £62,000 a year in borrowing costs.

The council has been run by Labour since 2022. The party retained power in May despite losing seats to the Conservatives and ultimately ending up with the same number of councillors as the opposition group.

Speaking in April, Peter Zinkin, leader of the Tory opposition, accused Barnet Labour of being “utterly, utterly financially irresponsible”. He described the administration’s use of EFS as akin to publishing “a financial suicide note” to the borough’s residents.

The BBC Shared Data Unit’s research has found that councils across the UK will need to plug a combined £3.8billion budget gap by the end of next year, despite planning £3.2bn of savings in 2026/27.

However, even after making those savings, councils are forecasting a further £3.8bn shortfall by the end of the 2027/28 financial year.

Responding to the recent findings, a Barnet Council spokesperson said: “The council is taking measures to ensure that its future financial sustainability is viable by investing in prevention, housing and digital and data transformation, reducing costs in demand-led statutory services like social care and homelessness and working alongside neighbouring boroughs and London Councils to ensure best practice is being adopted.”

They said use of EFS reflects a government acknowledgement that the council has been underfunded over recent years. According to the local authority, the measure has been used “to help bridge the gap while we are working to deliver our plan to reach financial sustainability in three years”.

The spokesperson added: “The £113m quoted was the estimated budget gap for 2027/28 when the 2026/27 budget was set […] we are working on measures to reduce this gap [by March 2027].”

They also argued that “a speedy resolution” to the Casey Commission, an ongoing independent review of the adult social care system due to be published in 2028, would help “struggling” councils “get on a firmer financial footing”.

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