An Independent Review Called Barnet's Finances Highly Fragile and Said It Had To Raise Council Tax. The Council Has Now Proposed Doing So By 32 Percent.
Estimated reading time: 8 minutes
In short. The Chartered Institute of Public Finance and Accountancy reviewed Barnet Council's finances for the government in May 2026 and found them "highly fragile", with reserves of £15m and a financial resilience reserve of £11.3m set against a deficit it projected would grow from £79.3m this year to around £244m by 2030-31 [1]. Among its recommendations: a review of the level of council tax, to be completed by September 2026 [1]. A report now before Barnet's cabinet proposes a 32 percent rise, which would need the Secretary of State's agreement as well as councillors' [2]. Over the two years covered by that review, Barnet has had £135.3m in Exceptional Financial Support agreed in principle: £55.7m for 2025-26 and £79.6m for 2026-27, the latter approved on condition that CIPFA carry out the review that followed [3] [4].
Barnet's own finance officers describe a council that knows what is wrong with its budget and cannot yet fix it fast enough. That is also, in blunter language, what the government's own reviewer concluded five months before the council put a council tax rise of nearly a third on the table.
What the review found
CIPFA's external assurance review of Barnet was commissioned by the Ministry of Housing, Communities and Local Government as the price of approving the council's Exceptional Financial Support for 2026-27, and the finished report was published on gov.uk on 18 August 2026 [1] [4]. Dated May 2026, it describes a council whose medium-term financial strategy shows deficits "escalating rapidly", from £79.3m this year to roughly £244m by 2030-31, against less than £20m of recurring savings identified across the whole of that period [1]. Adult social care, children's services and temporary accommodation are named as the biggest drivers, with demand and market costs continuing to outpace whatever savings the council's transformation programme manages to deliver [1].
The review's figures on reserves make the scale of the gap concrete. General Fund reserves stand at £15m and a separate financial resilience reserve holds £11.3m, both well short of the deficit the council is already running this year, let alone the one CIPFA expects by 2030-31 [1]. The council's Housing Revenue Account is forecast to become unviable beyond 2027-28, and its exposure through companies, joint ventures and service investment loans now exceeds £400m, governance over which CIPFA says has improved but remains underdeveloped relative to the scale involved [1]. The report is also specific about what it thinks happens if nothing changes: "the council's assumption that EFS is temporary is not currently supported by a credible pathway to a balanced budget" [1].
Among the seven risks CIPFA flagged, one reads as a direct instruction rather than an observation: the council should develop "a realistic, prioritised and deliverable savings plan, including a review of the level of council tax", with a named deadline of September 2026 [1]. The review also pointed at how the council makes decisions, describing a "cautious, consensus-led culture" that risks delaying difficult financial choices, at a council where no party has held a majority since the local elections in May 2026 and Labour governs only after the Conservatives abstained in a tied leadership vote [1] [5].
Two years of borrowing to keep the lights on
The £79.6m Barnet has agreed in principle for 2026-27 does not arrive on its own. It follows £55.7m agreed for 2025-26, both published in the government's own guidance on which councils have been granted Exceptional Financial Support and how much [3] [4]. Together that is £135.3m over two years, support that in practice means permission to borrow or draw down capital receipts to cover ordinary running costs that the council's income cannot meet, rather than a grant it does not have to repay [3] [4]. CIPFA's review notes that this borrowing carries its own sharply rising financing costs, which fall on future revenue budgets just as adult social care and homelessness pressures are growing, and that the cost of any further EFS Barnet needs in 2027-28 has not yet been built into its own financial strategy [1].
The council's answer: tax, mostly
Barnet's response, a report called the Plan for Financial Sustainability, went to its scrutiny committee on 8 October and is due before cabinet on 12 October [2] [6]. According to Local Government Chronicle's reading of that report, Barnet's council tax is 32 percent below the average rate central government assumes when allocating funding, a gap the council says costs it £74m a year: for 2026-27 the government assumes a Band D charge of £2,060, while Barnet's own charge is £438 lower [2]. Closing that gap in full is modelled to raise about £70m a year, the single largest quantified contribution so far identified towards the council's £200m target for 2029 [2].
Simon Radford, Barnet's Labour cabinet member for financial sustainability, put the scale of the task in blunt terms: "The task is mammoth, we need to find £200m of savings or cost avoidance within three years" [2]. He went further on the limits of what the council can do alone: "none of the levers in our control can tackle the scale of future demand for these services without national policy intervention. Cutting all non-statutory spend would stop the work that helps prevent the need whilst only reducing the council's budget by £18m compared to the £200m forecast demand" [2].
Why Barnet needs permission that other boroughs already have. Wandsworth, Hammersmith and Fulham, Kensington and Chelsea and Westminster have all been granted standing flexibility to exceed the referendum limit on council tax, part of a deliberate government choice announced in December 2025 to redirect money away from six named low-tax authorities [7]. Barnet was not one of the six. Its 32 percent proposal is a one-off request that still requires the ordinary sign-off needed for any rise above the normal cap, from both elected members and the Secretary of State, with no guarantee either will agree before the council sets a budget [2].
No figure has been decided. The report's own wording is explicit that the rise "has not yet been approved and would require agreement from the Secretary of State and elected members", and the council is running a public consultation, including an online survey and a virtual question time on 26 October, before any decision is taken [2]. Asked about councils raising tax this way, a Ministry of Housing, Communities and Local Government spokesperson said only that "local authorities decide the level of council tax they wish to set, but we are clear that in doing so they should put taxpayers first" [2].
The opposition's view, clearly labelled as such
Councillor Peter Zinkin, leader of the Conservative group on a council where his party holds exactly as many seats as Labour, published his own reading of the same report on the day it reached scrutiny. His criticism was about what the report leaves out rather than what it proposes: the £70m council tax contribution, he wrote, is "hidden in an appendix" rather than set out in the published summary, and "the papers do not identify specific service reductions. They do not identify major asset disposals" [8]. His verdict was blunt: "A £200 million challenge cannot be met with aspirations alone" [8]. That is a political judgement, not a finding of CIPFA's review, and this site has not independently verified the appendix point; it is reported here as the opposition's stated position, not as fact.
What happens next
Cabinet considers the Plan for Financial Sustainability on 12 October. Nothing before it that day sets a council tax rate: that decision, if a rise above the normal cap is still on the table once the consultation closes, would need to go to Full Council and then to the Secretary of State separately, with the government having given no indication yet of whether it will agree [2]. What CIPFA's review already makes clear is that the alternative to a rise is not nothing. It is a council whose own reviewer says its plan to keep treating emergency borrowing as temporary is not, on the current numbers, credible [1].
Sources
- The Chartered Institute of Public Finance and Accountancy, "London Borough of Barnet Council: External Assurance Review", May 2026, published by the Ministry of Housing, Communities and Local Government, 18 August 2026. https://assets.publishing.service.gov.uk/media/6a7ecc4203b4fe14b1e7de33/Barnet_External_Assurance_Review_2026.pdf
- Steven Downes, "Borough moots 32% council tax hike", Local Government Chronicle, 7 October 2026. https://www.lgcplus.com/finance/borough-moots-32-council-tax-hike-07-10-2026/
- Ministry of Housing, Communities and Local Government, "Exceptional Financial Support for local authorities for 2025-26". https://www.gov.uk/guidance/exceptional-financial-support-for-local-authorities-for-2025-26
- Ministry of Housing, Communities and Local Government, "Exceptional Financial Support for local authorities for 2026-27". https://www.gov.uk/guidance/exceptional-financial-support-for-local-authorities-for-2026-27
- Barnet Post, "Rawlings returns after Tories abstain on leader vote", 19 May 2026. https://barnetpost.co.uk/2026/05/19/rawlings-returns-after-tories-abstain-on-leader-vote/
- Barnet Post, "Putting Barnet Council's finances onto a sustainable footing", 19 August 2026. https://barnetpost.co.uk/2026/08/19/putting-barnet-councils-finances-onto-a-sustainable-footing/
- Civic Scrutiny, "Hammersmith and Fulham Could Raise Its Council Tax by 150 Percent. A Government Formula, Not the Council, Opened That Gap.", 6 October 2026. https://www.civic-scrutiny.co.uk/2026-updates/hammersmith-fulham-council-tax-150-percent-rise.html
- Peter Zinkin, "Labour's own plan shows lack of clarity on council tax", Barnet Post, 8 October 2026. https://barnetpost.co.uk/2026/10/08/labours-own-plan-shows-lack-of-clarity-on-council-tax/