Labour administration defends high debt levels while Conservatives slam “reckless spending” after the council’s auditors staged an intervention aimed at reducing financial risk, reports Grace Howarth, Local Democracy Reporter

Enfield Civic Centre with (left) cabinet member for finance Tim Leaver and (right) shadow finance spokesperson James Hockney

Councillors have clashed at Enfield Civic Centre after an auditor issued statutory recommendations to Enfield Council to help “de-risk” its debt levels.

At a full council meeting last night (Wednesday 12th) Paul Dossett, a partner at Grant Thornton, told councillors the auditing company had identified issues of “significance” with the council’s finances.

Normally the audit process, which usually includes an annual internal and external audit, goes through the general purposes committee.

However, Dossett noted there were “no audited accounts from the past four years to draw assurance” before the company began working with the council in 2023/24 to start “understanding issues”.

The council’s debt is currently £1.286billion, and is forecast to rise even further to £1.5bn by the end of the current financial year. The cost of servicing this debt each year – including both repayments and interest charges – is currently £31.4m, with this figure expected to grow to £35.4m in 2026/27 and £39.4m in 2027/28.

The council’s risk reserves, at £32m, have also fallen below the council’s own assessed minimum threshold of £43m.

In its report the auditor added work to reduce the financial risk of Meridian Water, the council’s flagship housing development project, as well as council-owned companies Energetik and Housing Gateway, “should be prioritised”.

Dossett said: “Obviously there’s debt in all local authorities of any size […] and most of that is what we’d call nominal capital activity of a local authority. Obviously this council has made a number of investments over a period of time.

“The Energetik company has been set up, the Housing Gateway company, and the Meridian Water project [are all] significant investments. This takes your debt position, as the report shows, to a significant level.”

Explaining the risk connected to the current debt level, he added: “Some of the risk is the function of changes in interest rates or the market, but the council is in a position where there is a degree of financial risk associated with recovering that debt effectively via disposals [selling assets] over a period of time.”

Mentioning Woking Council, which declared effective bankruptcy in 2023, Dossett said Woking’s investments “became toxic” and the debt unrecoverable, but added he didn’t “think” Enfield was in that position yet.

Giving a wider picture, he explained Grant Thornton audited 36% of UK local authorities and said 14 out of the 175 councils in its profile were in a similar position to Enfield.

Reacting to the report and Dossett’s comments, James Hockney, the opposition Conservative group’s shadow councillor for finance, said: “The auditors have said the debt is too high and must come down and for years the Conservatives, the opposition, have said the debt is too high and we’ve been mocked, jeered and heckled – but tonight we’re vindicated.”

Fellow Conservative councillors Lee Chamberlain and Maria Alexandrou said the council’s projects and investments were financially unsustainable.

Cllr Chamberlain said that despite being warned by a “non-political source” the council’s response, in the report, was only “to do what people [the council] are already doing”.

He said: “Had what is already being done been sufficient, then we would not be here tonight, this debate would not have been triggered.”

Cllr Alexandrou also accused the ruling Labour administration of overusing the word “robust” to describe its finances and said “bust” was more appropriate.

She added: “They [the council] went on a spending spree with no thought for the consequences. Labour are facing a tidal wave of debt after years of reckless spending. Debt interest is now £31m and that’s £31m not spent on essential services, which increases by £4m next year.”

However, Labour councillor Josh Abey fired back, saying “a certain mini budget” crashed the economy and sent interest rates and inflation rates “through the roof”.

He added the council had used a “much reduced” amount of its budget on debt repayment this year despite “economic adversity”.

Cllr Abey added: “Even in the face of that economic adversity, this administration has invested in this borough [and] it’s important we don’t lose sight of that.

“The logical conclusion of the opposition’s smug rhetoric tonight is that the people of Enfield would have received less investment if they [Conservatives] were in charge.”

Tim Leaver, the council’s deputy leader and cabinet member for finance, said the sky “hasn’t fallen in” and the report “didn’t speak against [the council’s] prudence”.

He said: “The future, the action and the activity are for us, and when the report does touch on it, it actually welcomes what we are already doing.”

After the debate Labour councillors voted in support of the report’s recommendations, while the Conservatives abstained.

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