Barnet Council faces £200m budget gap

Barnet Council is confronting a significant financial challenge, with a stated budget gap of £200 million. The council plans to discuss this situation with residents at an upcoming question time event. Cabinet member for finance, Simon Radford, has outlined some of the factors contributing to the deficit and potential strategies to address it.

Cipfa Report Recommendations

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An external review made 18 recommendations for the authority, which faces a projected £113.5m budget deficit.

A report published in August by the accountancy body Cipfa, commissioned by the Ministry of Housing, Communities and Local Government, analysed the council's finances. This followed Barnet Council's requests for exceptional financial support over the past two years. The report's recommendations include a review of council tax rates and consideration of reducing the frequency of bin collections. Councillor Radford described the report as confirming what the council already understood regarding the scale of the financial situation and the measures already being taken.

Rising Demand and Revenue Shortfall

The core of the financial difficulty lies in the increasing demand for essential services versus the council's ability to generate revenue. Councillor Radford stated that demand for adult social care, children's services, and temporary accommodation for homeless individuals is increasing by 10% annually. In contrast, the council's revenue to fund these services is only increasing by 5% each year. This disparity creates a fundamental challenge in meeting legal obligations for these services.

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Councillor Radford indicated that a potential increase in council tax is being considered. A band D household in Barnet currently pays around £1,500 per year, which is below the national average of approximately £2,000. Raising council tax to the national average could generate an additional £75 million annually, which the council believes would significantly alleviate the financial pressure.

Legacy and Service Delivery

Councillor Radford attributed some of the current financial difficulties to the outsourcing of council services, particularly to the private provider Capita, by the previous Conservative administration. He suggested that private providers may prioritise profitability over cost control. While the current Labour administration is reviewing its contracts and considering bringing some services back in-house, the precise impact on costs remains unclear. The council also faces challenges related to its limited stock of council housing, being sixth lowest in London, which contributes to temporary accommodation costs. Similarly, a lack of in-borough children's homes necessitates reliance on private providers.

Future Strategies and Resident Engagement

Looking ahead, Councillor Radford expressed a belief that the council can influence the trajectory of its financial situation but cannot entirely alter the underlying trend. He remains hopeful for changes in central government funding approaches for essential services and sees potential in technology, including AI, for predictive analytics and process improvement, provided the right data is structured and understood. The council is also working with organisations like Citizens Advice and foodbanks to support residents with council tax arrears before enforcement action becomes necessary. Councillor Radford emphasised the need for residents to understand the difficult trade-offs involved in balancing the budget and invited them to engage in the decision-making process.

The decision on whether to reduce bin collections, as suggested by Cipfa, is still under consideration. The council's recycling rate currently stands at approximately 28%, significantly below its 50% target.