The civic centre has been bailed out of a financial hole ahead of agreeing its 2025/26 budget next week, reports James Cracknell

The government has granted a request from Enfield Council for £30million in ‘exceptional financial support’ ahead of agreeing its next budget.

The money will be used by Enfield Civic Centre to both plug an overspend during the current 2024/25 financial year, with £20m now available for this, as well as £10m for closing the gap in the 2025/26 budget, which will be voted on by councillors next week.

Enfield is one 30 local authorities across the UK and six in London to be bailed out this week by the government under its ‘exceptional financial support‘ (EFS) mechanism, which was created in 2020 by the previous Conservative government as a way to help struggling councils avoid effective bankruptcy via a Section 114 notice.

However, EFS has been used by more councils this year than ever before, pointing to a wider crisis in local authority funding which the new Labour government claims it will fix in time for 2026/27.

In Enfield’s specific case, the £30m will be met by reallocating council capital receipts.

Welcoming the news today (Friday 21st), council leader Ergin Erbil said: “The announcement of £30million in additional support for Enfield is very welcome. Make no mistake, while Enfield has been savaged by cuts forced by the underfunding of local government by the previous Conservative government, Enfield Labour has, and will continue to, set a balanced budget and not raise council tax above the 5% limit.

“The EFS funding allows us to use our capital receipts to fund this exceptional financial support without additional borrowing or debt costs. This responsible approach to budget planning will allow us to use our own funds to create a safety net to protect us from external risk.

“We welcome the fact that the new Labour government are seeking to work with councils seeking this funding to protect our communities and ensure we continue to see value for money, rather than punishing councils further by levying an additional 1% onto the cost of borrowing this money. Additionally, we have balanced the books again despite serious financial challenges and we are not in danger of having to issue a Section 114 notice.”

Enfield Council asked for £30m under the EFS mechanism in January after realising that it would need to deplete its reserves in order to both cover overspending this year and the budget gap next year. Even with the £30m, however, the civic centre says it still needs to use £5m of reserves to balance its 2025/26 finances.

The council says its overspending has been driven by demographic pressures including the rising cost of temporary accommodation and social care.

In the long-term, Cllr Erbil said in a recent interview with the Dispatch that he was lobbying government ministers to “fix” the borough’s “unfair” funding settlement, which has been found by the Institute of Fiscal Studies to be the seventh-worst in the UK when taking local deprivation into account.

The opposition Conservatives, meanwhile, have long pointed to Enfield’s high debt level as a key concern, with around £1.25billion currently owed to various creditors.

James Hockney, the Tory shadow cabinet member for finance in Enfield, said: “Enfield Labour-run council is in a financial crisis, needing £30m of emergency funding to avert bankruptcy. The mixture of huge debt and interest payments, wasteful spending, government National Insurance Contribution (NIC) increases and the real-terms cut government funding means the council’s finances are in a perilous state.”

The “real-terms cut” mentioned by Cllr Hockney refers to this year’s settlement funding assessment, essentially comprising the overall central grant and share of business rates given to local authorities by Westminster each year. In 2024/25, under the Conservatives, Enfield received a 5.3% increase, but under the new Labour government it has received a below-inflation rise of 1.45%.

Since 2010, however, successive Tory government cuts in the so-called ‘austerity’ era have forced Enfield Council to find savings worth £243m and reduce its total spending by almost half over this period.

The Dispatch will provide full coverage of the council’s new budget and what it contains next week.

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