At a full council meeting last week (November 12) Paul Dossett, a partner at auditor Grant Thornton, told councillors it had identified issues of “significance” with the council’s finances.
Normally the audit process, which includes an annual internal and external audit, goes through the council’s general purposes committee.
However, Mr 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.
The council’s debt is currently £1.286 billion, 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 £31.4 million , 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”.
Mr Dossett said there is debt in all local authorities of any size, adding that the council has made a number of investments over time, with Energetik, Housing Gateway and Meridian Water project taking its debt position to a “significant” level.
He explained there was some risk in changes in interest rates or the market, but also a degree of risk associated with recovering that debt by selling assets.
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 Mr Dossett’s comments, the opposition Conservative group’s shadow finance councillor Cllr James Hockney said: “The auditors have said the debt is too high and must come down and for years the Conservatives 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 the council are already doing”.
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 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.”
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. It’s important we don’t lose sight of that.”
Cll rTim 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.”
Labour councillors voted in support of the report’s recommendations, while the Conservatives abstained.
NOTE FOR EDITORS
The Grant Thornton report is available here: https://governance.enfield.gov.uk/documents/s111541/LB%20Enfield%202024-25%20Statutory%20recommendation%20report%20-%20Final%20Draft%2031102025.pdf
