Barnet Tories facing £62 million budget gap 'armageddon' after overspending

Labour councillors secure vote to bring Capita CSG finance function back in-house
A whopping budget gap of £62 million to 2024/25 has emerged in Barnet Council's finances in the last quarter sparking criticism of Capita CSG's ability to provide accurate financial forecasting, and Barnet Council's ability to monitor the outsourced finance function.

An unforseen overspend of £7.9 million in 2017/18 (£13.5m before use of reserves) means that Barnet Council now has to find £9.5 million savings in this financial year (2018/19) compared to a balanced position forecast in March.

The budget gap for 2019/20 has increased from £5.9 million to £19.3 million, and going forward the Council now believe they will need to find savings as follows:

£34.3 million in 2020/21

£42 million in 2021/22

£62 million by 2024/25

The Council has used £21.2 million in reserves to cover the total overspend in 2017/18, and £13.355 million has been transferred from ear marked reserves to replace general fund balances which would otherwise have depleted to zero due to the overspend.

Detailed proposals to meet the in-year budget gap will be brought to an additional Policy & Resources Committee meeting in July. Further explanation as to how the overspend occurred without anyone noticing will be reported to the Financial Performance & Contracts Committee on 2 July.

At last night's Policy & Resources Committee (11 June) Labour councillors called for the Capita CSG strategic finance function to be brought back in-house, and secured agreement from the Conservatives that options to do this would be included in the budget update at the July Committee.

Leader of the Barnet Labour Group, Cllr Barry Rawlings said: “Barnet Council is facing budget armageddon and no-one seems to understand how this happened without anyone noticing until the last minute.

"Capita CSG finance already failed to complete the Council's accounts on time last year, and now it seems they are incapable of accurate budget forecasting.

"The Council don't seem to have a handle on what Capita are doing, and the Barnet Tories who are supposed to be 'in control' looked utterly clueless.

"At a time of limited resources the Council must have complete control over and confidence in its finance function, so we are calling for the strategic finance team to be brought back in-house immediately.

"We also need answers about how this happened in the first place. The massive budget gap will have an impact on front line services - we need to know exactly where the £9.5 million savings for this year will be found and how this will affect residents."

Ends.

Notes

1. The budget report from Policy Resources (Agenda Item 7)http://barnet.moderngov.co.uk/ieListDocuments.aspx?CId=692&MId=9458&Ver=4

For more information contact:

cllr.b.rawlings@barnet.gov.uk

To contact the Barnet Labour Group: 020 8359 2568


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