A perfect storm

David Floyd talks to cabinet member Simon Radford about his plans to fix the council’s finances

In its own words, Barnet Council is “facing a £200m budget gap”. Later this month, council leader Barry Rawlings and his cabinet will hold a question time event to discuss the situation with residents.

Last month, I sat down with cabinet member for finance, Simon Radford, to discuss some of the factors that have led the council to this point and hear what he plans to do about it.

In August, accountancy body, Cipfa, published a report commissioned by the Ministry of Housing, Communities and Local Government into the council’s finances, following its requests for exceptional financial support over the past two years. Its recommendations included calling on the council to review council tax rates and consider reducing bin collections. 

Cllr Radford describes the report as “a nice way of telling us what we already knew in terms of the scale of the situation and some of the moves we’d taken to try and address it”.

Describing the legacy of the previous Conservative regime in the borough, which Labour defeated in 2022, he says that “we inherited a life raft on pretty choppy seas.” However, he adds: “We’ve now got a seafaring vessel, but the storm has got worse. We’re kind of in a perfect storm.” 

The recurring themes of the interview are that the Conservatives left Barnet in a mess, particularly due to the outsourcing of many council services to private provider Capita and that Barnet Labour has now got the basics right but that it is also grappling with challenges beyond its control. 

Aside from the party politics, this is “the fundamental inescapable maths is that the demand is going up by 10% and our ability to raise revenue to fund it goes up by 5%”. 

The ‘demand’ is the cost of adult social care, children’s services and temporary accommodation for homeless people, all of which the council has a legal duty to provide.

I point out, though, that this is not a surprise. In 2011, council officers put together a document labelled the ‘Barnet Graph of Doom’ that predicted in 20 years the council would be forced to spend its entire budget on social care and children’s services.   

I wonder why the situation hasn’t been tackled earlier. In response, Cllr Radford says: “There are two elements to that. One is the will to do something about it, and the second is the ability to do something about it.”

He partly blames the previous Conservative leadership for keeping council tax low. A band D household in Barnet currently pays around £1,500 a year, while the national average is around £2,000. “If we raised it to average, we’d get about £75million more a year, which would obviously make a massive difference.”

However, when the Tories pointed out the need for council tax increases before this year’s elections, Labour slammed them for wanting to put tax up. Now when asked if the borough’s council tax will be raised to average levels, Cllr Radford’s response is: “I think the answer is partly right.”

The situation on the role of Capita is similarly complicated. Cllr Radford is clear that having services run by the outsourcing giant limited the council’s ability to keep costs under control. He explains: “They’re thinking about ‘how do we do this more profitably?’ which is a different conversation.”

However, several attempts to ask whether Labour’s decision to take services away from Capita has resulted in lower costs do not produce a clear answer either way. What Cllr Radford does say is that “sometimes it’s about managing contracts more effectively or getting better value for the contracts we have. For some, it’s about bringing it in-house.” 

In terms of additional steps that could have been taken to avoid the current situation, Cllr Radford points out that Barnet has the sixth lowest number of council houses in London and says: “What we could have done was build a whole load of council houses to bear down on our temporary accommodation costs.

“We didn’t do anything like that. We could have built a whole bunch of in-borough children’s homes so that we didn’t have to rely on private equity.”

In terms of the overall picture, Cllr Radford is clear that: “We can bend the curve but we can’t change the fundamental path of the curve.”

He remains hopeful that part of the solution will come from central government changing its approach to how the costs of essential services are met. 

One element of that is Baroness Casey’s review into the funding of social care which Cllr Radford says “can make a massive difference”. 

While not suggesting this is likely to happen, he adds: “If all of a sudden they say the NHS is going to pick up the tab then the conversation on council tax becomes quite different.” 

However, he is also optimistic about the potential role of technology in tackling the budget gap: “There are people who go out there and just say AI, AI, AI, like it’s some sort of magic wand or something.” 

But, he says: “To use it effectively as a process, you need to get the right data and you need to structure the right data. You need to understand workflows and processes. And we also need to think about how we use AI to do predictive analytics.”

He explains that “one of the things about bending the cost curve is that it costs a certain amount of money once people come to us in crisis” and talks about work the council is doing with Citizens Advice and foodbanks to work out how it can help people in council tax arrears before taking enforcement action which would ultimately lead to higher costs.

While a big rise in council tax seems likely, the position on bin collections is apparently still to be decided. “If we decide not to investigate or look into things that CIPFA recommended, then I dare say we have a weaker hand when it comes to saying what we’d like as a wider package.”

An additional challenge, Cllr Radford points out, is that, while the council’s target for recycling is 50%, the current level is around 28%.

As he works on his plan to solve an apparently unsolvable problem, Cllr Radford is keen to emphasise: “We’re trying to make very difficult trade-offs. And the more that we can understand how people value the trade-offs, as long as they acknowledge the trade-offs need to happen, the better decisions that we can make. And so that’s the conversation which we’d like to have.

“We’re not going to offer easy solutions, but we want people to know the difficult problems.”

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