Hendon Town Hall
Barnet Council’s Cabinet met on Tuesday evening (9 December) to review the council’s budget, including proposals for savings and income generation for the 2026-27 financial year.
While the council has stabilised spending and kept a balanced budget in-year, demand for statutory services is set to grow next year.
Cabinet Members considered the need to apply to government for Exceptional Financial Support (EFS) to meet this demand and set a balanced budget. This follows the council receiving permission in February to borrow £55.7 million in EFS from government to close this financial year’s budget gap.
The council faces an estimated budget gap of £88 million despite identifying £10 million in savings and income generation for the coming financial year. The pressure exerted on the council’s finances by rising demand for statutory support with temporary accommodation costs and increasing social care costs, along with the cost of financing historic capital projects, means that the financial challenge continues to intensify.
One in four London councils have received EFS in the past 12 months and more are expected to follow in the next financial year.
The council is currently awaiting the outcome of government’s provisional financial settlement, which is expected in mid-December and could offer positive news but is not expected to significantly reduce the budget gap for next year.
Cllr Barry Rawlings, Leader of Barnet Council, said:
“Even though we have kept within a balanced budget in-year and identified £10 million of further savings in the next financial year, we cannot keep up with the demand for our statutory services.
“The council continues to face a perfect storm of unprecedented demand for costly temporary accommodation and social care services, which we have a legal duty to provide. High interest rates have led to a surge in the cost of providing these services. Combined with more than a decade of funding cuts from government, we are presented with extremely tough choices.
“These are structural deficits all local councils face, and we expected to need a second round of Exceptional Financial Support (EFS) to help tide us over while we work towards financial sustainability. EFS ensures that our residents will continue to receive the high level of services they deserve. However, we will need to repay any portion of the government support that we use in the form of borrowing, which will further stretch budgets, so this is a temporary solution.
“Ever-increasing demand for statutory services means that our road to financial sustainability will take longer than hoped, but we continue to bear down on costs by prioritising work to prevent people needing costly services.
“We will also be engaging with residents to understand what is most important to them, so we can reshape services to focus on those things and deliver them even more cost-effectively.”
The council’s proposed budget for the next financial year, including setting the rate of Council Tax for 2026-27, will be presented to Full Council for approval on Tuesday 27 February 2026.
ENDS