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Council facing budget gap of almost £45million next year amid “unprecedented crisis” warning

Barnet Council is facing a budget gap of almost £45million next year amid warnings of an “unprecedented crisis” caused by a spike in inflation.

Town hall bosses have so far identified around £35m of potential savings designed to help plug the gap, but the measures may not be enough to avoid having to raid the council’s reserves and make some staff redundant.

The projected budget gap for 2024/25 has grown by more than £33m since the start of this year, when it was estimated at just £11.2m.

Despite plans to raise council tax by a total of 4.98% – a 2.98% increase in the core rate plus a 2% rise in the precept used to fund adult social care – the gap still stands at £9.9m, assuming all the savings currently identified are made.

Council leader Barry Rawlings blamed the Conservative government’s austerity programme for wiping more than £100m off the council’s finances since 2010, and the “farcical” mini-budget approved last year under former prime minister Liz Truss, for stoking inflation.

He said other local authorities were facing similar financial difficulties and the council’s plans to invest in Barnet – which he contrasted with a “slash and burn” approach he claimed was favoured by the Conservative opposition group – would ultimately save money.

But Tory leader Dan Thomas hit back at the comments, claiming the Conservative administration had always invested in adults’ and children’s services because it recognised the need to protect the vulnerable.

He said: “Last year, you said you inherited some robust financials from the previous Conservative administration. Here we are a year later, you have crashed the council’s finances. You’ve now reduced the overspend to £10m – it is still the largest overspend forecast I can recollect.”

The comments came during a meeting of the council’s overview and scrutiny committee on Tuesday (21st). A report presented to the committee states that the “sharp spike in inflation and energy prices” this year represents an “unprecedented crisis” for councils, pushing up the cost of services as demand for them continues to grow.

It adds that this “risks hampering the council’s efforts to help level up communities and support residents through the cost-of-living crisis”.

To reduce the budget gap, the council is planning to save £10.6m on its communities, adults and health department; £7.5m on customer and place; and £6million on family services. Further savings include £9.5m earmarked as “cross-council” spending reductions.

Information sent to staff, seen by the Local Democracy Reporting Service, states that there are plans to cut “unfilled vacancies and some senior manager posts across the council” but adds that there may be “some redundancies”.

During the meeting, opposition councillors continued to raise concerns over the authority’s finances and the impact of some of the proposed savings.

The decision to buy 249 flats on the Colindale Gardens development to offer as affordable homes was questioned, but members of the Labour administration said the acquisition was cheaper than building the homes and would bring in revenue for the council.

In July last year, Cllr Rawlings signalled his intention to bring all services previously outsourced to private firm Capita back under the council’s direct control by 2026. But Conservative councillor Richard Cornelius claimed this would “cost the residents of this borough well into the next council”.

There were also fears over plans to save £500,000 on support for people with a mental health need. Council officers said this was about helping people to “move into more independent settings” so they would need “less care and support”.

Responding to concerns over plans to save £400,000 on the costs of transport for children with special educational needs and disabilities by increasing the number being transported through personal budgets or multiple pick up points, officers insisted the council would not breach its statutory duty and said the saving was about working more effectively.

The budget is set to be presented to a cabinet meeting on 12th December. If approved, a public consultation on the proposals will begin on 18th December. If some savings are not agreed, the council may use its reserves to balance the budget.

Commenting after the meeting, Cllr Rawlings said the budget was “not in principle predicated on making redundancies” and they would only be considered as a “last resort”. He also pointed out that the Conservatives’ alternative budget proposed redundancies when it was presented to full council in February this year.