The Finance and Growth Overview and Scrutiny Sub-Committee met on Monday 7 September 2026 to discuss the challenging market conditions affecting development and regeneration projects, review a proposed long-term electricity procurement agreement, and examine the council's debt recovery processes. Key decisions included noting the market context for development, scrutinising the details of a proposed Power Purchase Agreement for electricity, and receiving updates on debt recovery across various council services.

Development and Regeneration Projects: Market Context and Case Studies

The committee received a presentation from John Percy of CBRE, detailing the extraordinary market conditions impacting residential development. He highlighted macroeconomic headwinds such as inflation, rising mortgage rates, and cost inflation, which are making previously marginal schemes unviable. The London residential market has seen a 3.7% annual fall in house prices, with buyer demand remaining deeply negative. While rental growth has moderated, a chronic undersupply persists. Housing starts in London have collapsed, with build-to-rent significantly impacted. Despite these challenges, Barnet ranks fifth in London for housing delivery against government targets, partly due to large-scale projects like Brent Cross Town.

Susanna Morales from Barnet Homes then presented two case studies:

• Moxon Street and Whitings Road: These two sites in High Barnet, originally granted planning permission in 2015 but stalled due to viability issues, have been redesigned to improve design quality and increase housing delivery. New planning permissions secured in 2023 allow for 56 homes, a mix of social rent, shared ownership, and private sale, with a focus on family-sized houses and four wheelchair-accessible homes at Whitings Road. A bespoke partnership model with Bugler Developments has been established to share development risk, with construction commencing in March 2026. The project has involved extensive community engagement, securing a letter of support from the Barnet Society.
• Little Strand: This 100% affordable rent scheme on the Grahame Park Estate involved demolishing eight bungalows and 46 garages to build 35 homes, comprising flats and family-sized houses. The project included a pocket park to enhance amenity. Despite public opposition during construction, largely concerning parking, the council learned valuable lessons about community engagement, which have been applied to subsequent projects like Copies Grove Estate and Silk House. The scheme was completed on budget in January 2025, generating approximately £2.4 million in social value.

Councillor Richard Cornelius, Chair of the committee, noted the challenging market conditions but acknowledged Barnet's strong performance in housing delivery. Members raised concerns about the long-term viability of schemes and the types of housing being built, with a consensus that traditional family housing is performing better than one-bedroom flats.

Review of Fixed-Price Electricity Procurement via Power Purchase Agreement (PPA)

The committee scrutinised a proposal to enter into a 15-year Power Purchase Agreement (PPA) to fix the wholesale electricity price for 4GWh of the council's electricity demand, sourced from a new solar farm. Chris Smith, Assistant Director of Estates, explained that the primary objective is not cost saving but price certainty to protect against market volatility and support the council's net-zero targets.

While the estimated savings are modest (£12,000 annually), the PPA is expected to provide price certainty and reduce carbon emissions. The preferred option, O1.3, involves a 15-year duration and 4GWh volume, offering the best value for money in the economic analysis, particularly when considering the monetary valuation of carbon savings. The proposal will go to Cabinet for approval, with delegated authority sought for the Assistant Director of Estates to undertake procurement, subject to a full business case confirming value for money.

Members expressed concerns about the 15-year commitment, the limited projected savings, and the potential risks associated with the contract. Questions were raised about the 40% volume figure, the lack of a break clause, and the comparison with other London boroughs' approaches. The committee noted that the focus is on hedging against volatility rather than immediate savings, but stressed the importance of scrutinising the contract's details. The potential impact on the council's balance sheet under IFRS 16 was also discussed, with a preference for a physical PPA to avoid classification as a financial derivative.

Overview of Council Processes for Debt Recovery

The committee received an update on the council's debt recovery processes across Adult Social Care (ASC), Council Tax and Business Rates, and Property Services.

• Adult Social Care (ASC): Caroline Glitre, Head of Customer Finance, detailed that total ASC sundry debt stands at £25.097 million, with £20.797 million classified as unsecured debt. The complexity of ASC debt, often involving legal processes like probate and deputyship, contributes to the age and difficulty of recovery. The implementation of the Oracle system has presented challenges, requiring manual interventions and impacting capacity for proactive debt recovery. Improvements are underway to review case management, legal recovery pathways, and enhance Oracle functionality. The service has a bad debt provision of £4 million.
• Council Tax and Business Rates: Allan Clark, Head of Finance: Exchequer, reported that collection rates for both council tax and business rates remain below pre-pandemic levels. Delays from the Valuation Office in assessing new properties have impacted council tax collection, as has the resolution of legislative changes affecting business rates relief for private schools. A new contract with Liberata, commencing 1 October 2026, is expected to improve collection rates through system enhancements, automation, and early debtor segmentation, with a target of 98% collection for both by the end of the five-year term.
• Property Services (Commercial Property Debt): Sal Waheed, Head of Property and Portfolio Management, presented that current commercial arrears stand at £1,556,342. The largest proportion of arrears is within Estates and the HRA. The report detailed the debt recovery process, from initial review and tenant engagement to escalation to enforcement via Crown Enforcement Services (CES) and legal action. Key risks include arrears becoming unrecoverable and payment plans not reducing debt quickly enough. Steps are being taken to minimise arrears by prioritising high-value cases, implementing an escalation timetable, and resolving disputed liabilities promptly.

Members raised questions about the effectiveness of the new Liberata contract, the impact of Valuation Office delays, and the council's approach to differentiating between an inability and unwillingness to pay. The complexity and age of ASC debt were highlighted, with discussions on when to write off unrecoverable debt and the timescales involved in these processes. The committee also inquired about the council's payables over 90 days old, which was reported as approximately £21 million.

Task and Finish Group Updates

The committee received updates on the progress of various Task and Finish Groups. The Allotment Management and Governance group has held 12 meetings and is compiling a report for Cabinet. The Food Security group has met with various organisations and visited a food hub, with its report presented to Cabinet. The Fostering and Young Carers groups have concluded their evidence gathering and report writing, with recommendations referred to Cabinet. New groups are being formed to examine Flats and Flats Above Shops Waste and Recycling, School Financial Deficits, Parking Policy, and Out of Borough Placements.

Cabinet Forward Plan and Work Programme

The committee reviewed the Cabinet Forward Plan for 2026-2027, identifying items for potential pre-decision scrutiny. They also considered the draft Work Programme for the Finance and Growth Overview and Scrutiny Sub-Committee for 2026-2027, which includes topics such as the renewable energy PPA, development and regeneration projects, debt recovery, and the council's financial forecast. Members were asked to provide input for the work programme.