Debt and interest payments are now costing Enfield taxpayers more than £31m each year, reports James Cracknell

The first new homes at Meridian Water were launched in September, but it’s still unknown when or how future phases of the scheme will be delivered to meet the 10,000 target — Borrowing costs relating to Meridian Water have become a key concern for Enfield Council

Enfield Council’s total debt is set to hit £1.5billion over the next year, it’s been confirmed.

Ahead of an Enfield Civic Centre debate tonight (Thursday 27^th) where councillors will vote on the Labour administration’s budget plans for 2025/26, a 196-page report reveals the extent of the council’s borrowing.

The council’s debt level has been steadily rising for several years as it follows a “borrow to invest” strategy with major housing projects such as Meridian Water and the regeneration of Joyce and Snells estates, both in Edmonton, require substantial up-front spending.

Back in 2023 the Dispatch reported the council’s debt – at that time just over £1.1bn – had become the tenth-highest among English local authorities, with concerns being raised over the impact of interest rates which had risen sharply since 2022.

The 2025/26 budget report has now provided an update and revealed that more than £31million will be spent next year on debt and interest payments – higher than the amount of ‘exceptional financial support’ (EFS) for Enfield authorised by the government last week.

The report states: “The council has a significant capital programme to support regeneration in the borough and to invest in the provision of affordable homes to address the needs of those who find themselves homeless. The council is also investing in its subsidiary company [Energetik] to deliver large energy-efficient infrastructure works to the borough.

“The council is forecast to have £1.5bn of external borrowing by the end of 2025/26 and this is a significant level of borrowing for the revenue budgets to sustain.”

It adds: “The total revenue budget allocated to fund borrowing costs will be £31.4m in 2025/26. Whilst this is within the 10%-12% of net revenue budget target, this still represents a significant proportion of the revenue budget.”

The borrowing connected to Meridian Water in particular has become a concern, the report reveals, as rising costs on the 10,000-home redevelopment have impacted the returns on investment that are predicted to be made.

The report states: “Due to the recent economic turbulence arising from global wars and the pandemic, the cost of the phases has increased, and disposal dates have slipped. This has led to interest being capitalised for much longer periods adding to the cost of each phase and meaning that it is less likely that the proceeds will repay outstanding debt.”

It continues: “As the cost of the asset is significantly increasing, this is now posing a significant risk that the eventual disposal proceeds will not cover the cost of the outstanding borrowing. If this proves to be the case, then the council will no longer have the asset but will have outstanding debt which has not been covered by the sales proceeds.”

The whole project is currently under review, it adds.

In relation to the £18m of savings set to be made in 2025/26 to balance the budget, first reported in January, the council has U-turned on its previous plan to keep its parks open all night after numerous safety concerns were raised by residents.

But even with the savings agreed, the budget report reveals that £5million will still need to be taken out of the council’s already-depleted reserves to cover expected revenue spending.

Regarding the council’s low reserves, the report states that the government EFS funding now available to the council – via the authorised use of capital receipts – will be used to replenish the coffers.

“This will significantly improve the adequacy of the council’s reserves to fund known financial risks and provide a much greater degree of assurance over the council’s ongoing sustainability,” the budget report states.

As has become commonplace in recent years, not just in Enfield but at most local authorities, council tax will again be raised by the maximum 5% allowed.

A full report from tonight’s budget debate will be published on the Dispatch website tomorrow (Friday 28^th).

No news is bad news

Independent news outlets like ours – reporting for the community without rich backers – are under threat of closure, turning British towns into news deserts.

The audiences they serve know less, understand less, and can do less.

If our coverage has helped you understand our community a little bit better, please consider supporting us with a monthly, yearly or one-off donation.

Choose the news. Don’t lose the news.

Monthly direct debit

Annual direct debit

£5 per month supporters get a digital copy of each month’s paper before anyone else, £10 per month supporters get a digital copy of each month’s paper before anyone else and a print copy posted to them each month. £50 annual supporters get a digital copy of each month's paper before anyone else.