Council accepts financial review recommendations as leader pledges to prioritise 'sustainability'

A new Barnet Council plan for reaching a point of financial sustainability is due to be published next month, reports Joe Ives, Local Democracy Reporter

Hendon Town Hall and (inset) leader Barry Rawlings

“Our priority is reaching financial sustainability,” claims the leader of Barnet Council – following a damning report into the local authority’s fiscal operations.

The comments were issued by Barry Rawlings, leader of the council’s Labour minority administration, at a cabinet meeting on Tuesday (16th).

They come in the wake of an ‘external assurance review’ carried out by the Ministry of Housing, Communities and Local Government (MHCLG).

The report, a condition of the ‘exceptional financial support’ (EFS) granted to the council by the government, was drawn through “desktop research” and interviews with councillors in April.

Its aim was to “assess the council’s financial position” and provide a “roadmap” for improvement. The latter has been reflected by 18 recommendations – almost half of which received a ‘risk rating’ of nine out of ten.

The causes of the MHCLG’s ratings include “the absence of a credible and deliverable savings plan” and “ongoing reliance on EFS and weakening financial resilience”.

These issues, the report found, have been deepened by inadequate reform of key – and costly – services, such as adult social care, children’s services and temporary accommodation. Here, the MHCLG concluded that demand and market pressures “continue to outpace transformation delivery”.

The local authority’s budget for the 2026/27 financial year, which started in April, saw the council borrowing £79.3m through the EFS to manage its budget shortfalls.

It was the second year in a row it had to balance its books this way, following £55.7m of EFS in 2025/26. However, the council does say that “only” £45.9m of the allowance was required during that period.

EFS allows councils to treat some day-to-day spending as longer-term capital spending, 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.

At the same time, data published by the BBC last month showed that the council is on track to have the largest budget deficit of any local authority in London by 2028.

Its shortfall is on course to reach nearly £113.5m by the end of the 2027/28 financial year – the second largest of any council in England.

Across England, only Hampshire County Council, with an expected deficit of nearly £180m, is expected to be in a worse position than Barnet by April 2028.

Speaking at Tuesday’s meeting, Cllr Rawlings said that the MHCLG’s report “did not take full account of the work being done”, including measures implemented since its completion.

Nevertheless, he said the council accepted all 18 recommendations, adding: “Our priority is reaching financial sustainability because everything else we want to do fails without that.”

Simon Radford, the council’s cabinet member for financial sustainability, is, alongside senior officers, due to submit “progress reports” to the MHCLG by the end of September.

Peter Zinkin, leader of the Conservative opposition in Barnet, questioned why draft indications of this update were not available at this week’s cabinet meeting. The decision, he said, was “completely strange”, given the proximity of the deadline for submission.

Cllr Radford responded, referring to the importance of using “the latest possible data” and of acting as the government had requested.

“Authorising people to do what MHCLG asked them to do is hardly revolutionary – in fact it’s rather sensible,” he added.

On Tuesday, it was agreed that the council’s “very detailed” ‘Plan for Financial Sustainability’ will be shared with members at a cabinet meeting next month.

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