Tonight’s Evening Boris has raised another question about how close Croydon is to financial collapse under the weight of its £1 billion debt: is Mike Fisher, the Tory council leader, or its “interim” chief executive, Nathan Elvery, among the 90 per cent of leaders who expect a local authority to go bankrupt?
The newspaper was reporting a survey conducted by Price Waterhouse Coopers which backs up the comments last week by Margaret Hodge MP to the Public Accounts Committee at Westminster.
The study warned that “cracks are appearing” as councils adjust to reduced levels of funding as a result of the Tory-led government’s austerity agenda.
As Inside Croydon reported, our council is budgeting to have a debt of £1.005 billion by 2017 – an increase in the borough’s liabilities of more than five-fold by this shambles of a council under Fisher. And that’s even with this year’s increase in Council Tax.
The PwC report says, “Below the surface, there are signs that cracks are appearing as councils adjust to the reality of continued and significant financial pressures, and anxiety that these will become even more pronounced after this month’s spending review.
“Those cracks are apparent through a growing concern that the savings secured to date, and to be secured in the near future, are beginning to impact upon the quality of services and outcomes.
“Nine out of 10 chief executives and leaders now believe that, within the next three years, some local authorities will get into serious financial crisis or fail to deliver the essential services that residents require.”
Andy Ford, PwC’s head of local government, said: “Having successfully delivered unprecedented savings over the last three years, councils have trimmed all they can, and there’s little left to achieve with more efficiencies alone. Local authorities are increasingly confronting fundamental questions about ‘what they do’ as much as ‘how they work’.
“The harsh reality is that public concern about service reductions is high, and understanding of the need for savings is low. The public are becoming increasingly opposed to reductions in local public services, particularly in visible services like road repairs and leisure services.
“The scale of concern about the impact of sustained austerity should not be underestimated. With the cracks already beginning to show, and difficult decisions ahead, councils need to act urgently in changing the way services are delivered or provided.”
Meanwhile, the department for communities and local government, which is imposing the cuts on councils up and down the country, appears to be in denial, claiming that residents are quite happy with the level of services provided.
They even reckon that there is more that councils can do in terms of cutting spending and raising money from reserves. This is a particular problem for Croydon, which already has a notably poor record on collecting Council Tax and appears to have staked everything – and lost – on the roulette wheel of the property market.
- Is Croydon on the brink with £1 billion borough debt?
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- Inside Croydon: For comment and analysis about Croydon, from inside Croydon
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