Barnet Council overspent on its budget by £22million last year, a report has revealed.
The £22.181m overspend for 2023/24 was discussed at a cabinet meeting on Tuesday (16th), with the council’s reserve position also falling below the £40m policy threshold.
Cabinet member for finance Ammar Naqvi described the “financial turmoil” and “extraordinary fiscal difficulties” faced during over the past year.
Cllr Naqvi said: “National inflation was over 10% and the Bank of England’s base rate of interest was at 4%, having been at 0.5% the year prior.
“It was an extraordinary time and the decisions we had to make were equally extraordinary, in order to get to a position that was balanced.”
Regarding the reserves position, Cllr Naqvi said: “It’s fallen to £39.996m, the number is seared into my brain, we have a plan to recoup that position to become more financially sustainable in terms of our reserves position.”
The council’s housing revenue account (HRA) budget finished with a surplus of £6.5m for 2023/24, a much “healthier” position than other London boroughs, Cllr Naqvi said.
Despite this positive outcome he added the council would be “diligent” and not become “complacent”.
The cabinet member for equalities and the voluntary sector, Zahra Beg, asked about the pressure to provide temporary accommodation given that central government was rolling back its use of hotels for asylum seekers.
She said: “Is it a fair comment to say if more asylum seekers are granted status that will increase our temporary accommodation need even further, and add another adverse aspect that we possibly might not have accounted for yet?”
Council leader Barry Rawlings acknowledged it was a “worry” and could become a “burden”.
He said: “This government, like the last, has said they want to get rid of using hotels. That will put a bigger burden on local authorities but we don’t know what the situation is. I do agree with Cllr Naqvi that the reserves may well be the biggest worry.
“That gives an indication that if the reserves are falling, then we’re not reaching our savings targets and that’s something we want to be very careful of.”
Local Democracy Reporter Grace Howarth covers the London boroughs of Barnet, Enfield and Haringey as part of the Local Democracy Reporting Service (LDRS), reporting on local government, housing, planning and community issues.
