Barnet Council is in trouble.
Commentary by Julia Hines.
On 12 October, the Cabinet of Barnet Council met to discuss their financial plans. And they are a mess.
They are the borough with the worst finances in London, and the second worst in England. Having borrowed £113 million over the past two years, they are now paying an estimated £7 million a year in interest. They expect the amount of borrowing to go up this year.
There's very little discussion of how we got here, no reflection, accountability or lessons learned. So here's my view.
How We Got Here
Times are tough everywhere for local government. It's a very difficult time.
The decision by the Conservative administration to outsource 80% of council functions to Capita was disastrous. Predictably. It is a great shame that Labour waited until it was too late, before trying to launch a judicial review. It was an expensive mistake.
The Tories also kept Council Tax frozen for many years.
In 2022, Labour ran on a manifesto of cutting Council Tax by 1%. This was incredibly foolish, and was never going to be possible. The cost of reimbursing Council Tax, to some residents who pay in full, some who pay by Direct Debit, and some who have discounts, would have been huge, complex and distracting. And then all the budgets would need to be reworked.
Labour broke that manifesto promise, which was the correct thing to do. It was a promise that should never have been made.
The following year, in order to try to be able to say that they had met their manifesto promise, Labour put Council Tax up, but by 1% less than they knew they needed to. They chose to put themselves, and us, in a hole.
It is easier for households to manage small, regular incremental rises, than the big leaps in bills, that we have and certainly will see. Council Tax may be, as Cllr Barry Rawlings described it, a regressive tax, but it is difficult to imagine anything more regressive than cutting Council Tax Benefit.
The Plan
Barnet predict that their annual deficit will be £198 million a year by 2029/30.
Next year they hope to cut the deficit by £84 million a year. Most of that, £71 million, will come from increased Council Tax. They are cagey about how much that increase amounts to, but they are benchmarking it on the National average Council Tax, of £2,400 for Band D, as compared to £2,000 in Barnet.
We may be looking at Council Tax increases of 30%.
Most of the other ways of cutting the deficit are not yet up for discussion, or are very high level.
The two biggest items in the budget are adult social care and temporary accommodation costs.
The plan to cut these costs looks partly at prevention. This is laudable. But if you really want to prevent falls in older people, you need to do more than fund a few exercise classes and Age UK Barnet's Handyperson Scheme. You need to encourage everyone to exercise. To keep older people independent you need to invest in even pavements, traffic calming measures and benches. You need to reach older people who aren't in touch with services, and overcome the barriers they see to keeping fit, whether that is walking in to a gym alone, or carrying heavy shopping. It means investing in navigators and buddies, it means listening and responding. It is the right thing to do, but it will cost. It will always be difficult to know what the impact really is, but it will, for some years, look like spending more, not less.
Barnet also want to drive down the cost of care. Sounds reasonable, but is it. Some of the care providers have had their funding whittled down for years, because this is the Council's obvious go to. There are real risks though. At one point, when the Tories ran the one per area. And then one of them collapsed overnight, leaving older people without help to get washed and dressed, get food, water or medication. This kind of sudden collapse is all too possible, especially if a care provider is owned by a private equity company, who may load the provider with debt, reducing the quality of care, and may well be willing to exit the market if returns are not high enough.
Reducing the reliance on temporary accommodation requires building social housing, which is, again, not cheap. It appears that central Government may help here, but to what extent Barnet will benefit is unclear.
This is not the fault of Labour, but is a legacy of lack of investment. But it will take time to see returns.
The other strand of this work is to reduce domestic abuse and VAWG in the borough. This is an important aim, but it requires intensive work, with specialist skills. If they imagine a social media or poster campaign will persuade people not to beat their partners, they will be sorely disappointed.
And then there is the reference to commercial opportunities. I would point to the £2.8 million the Labour administration wasted on the aborted Places in Barnet partnership with Kuropatwa brothers. A poor decision, recommended by a council officer with an undeclared conflict of interest, that should be a salutary tale.
The future looks grim, with rising need, a huge debt load, and a plan that, from where we sit, looks inadequate to the task.