Barnet Council ‘reserves will not be enough’ in 2021 without more emergency coronavirus funding

“If there’s no further funding and the forecasts remain as we are expecting, the reserves won’t be able to see us through to 2021.”

That was the stark message from Barnet Council’s finance director last week when asked whether the north London council might need to take out a section 114 notice – which is akin to declaring bankruptcy – as a result of Covid-19 funding shortfalls.

The town hall is forecasting a £26m hole in its finances if no government funding is forthcoming, and finance boss Anisa Darr told a meeting of its policy and resources committee that its cash reserves wouldn’t be enough to balance the books.

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Opposition leader Cllr Barry Rawlings (Lab, Coppetts) said: “No one thinks the government is going to fully fund the total cost of Covid-19, including the Barnet Tories. We don’t know how long the pandemic will last so things are looking bleak for the council’s finances.

“Unless there’s a major change we are facing desperate days in the coming year.”

Local government minister Simon Clarke MP said councils were receiving “unprecedented” support, including “£3.2 billion non-ringfenced emergency funding”. He said there was “a comprehensive plan” to support the ongoing viability of local government finances. He also pointed to a total of £27bn support for local business and councils combined.

A council spokesperson has since clarified its reserves are “well in excess” of “the impact Covid-19 will have in the current year” and that the town hall does not anticipate issuing a section 114 notice.

They added: “We will remain in contact with the government about the importance of continued financial support for local authorities.”