Budget could hit Croydon council and shops hardest

Local schools, pools and libraries are all under threat of the swingeing cuts ordered by “Call Me Dave” Cameron’s new government, with the council’s controversial £450 million redevelopment scheme of central Croydon among the spending plans also up for discussion at the next cabinet meeting in July.

Local businesses are primed for hard times after yesterday’s emergency Budget from new Chancellor Gideon Osborne, when the Lib-Con coalition government confirmed the feared 2.5 per cent hike in the “tax on shopping”, VAT.

The VAT rise will affect all businesses, but will hit retailers hardest, with a sharp downturn in consumer spending expected as a consequence in 2011.

Less money in the tills means smaller profits, and therefore probably fewer jobs. With Croydon’s local economy heavily dependent on big retail businesses on the Purley Way and in Centrale and the Whitgift Centre, grim times could be ahead.

“Government plans to hike VAT to 20 per cent from 17.5 per cent will hurt small businesses in the high street,” Sue Wilkinson, of the regional branch of the Federation of Small Businesses, told Inside Croydon.

Caterham-based pollsters, Gauge Opinion, found 54.4 per cent of the public nationally believe we will all be worse off in 2011 as a result of yesterday’s Budget.

Ken Livingstone, who launched his campaign as Prospective Labour candidate for London Mayor, called the Budget “a Robin Hood in reverse”.

The unemployed, pensioners and the poor will be affected by the increase VAT from 17.5 per cent to an all-time high of 20 per cent next year, yet meanwhile the Government has decided that big companies should benefit from cuts in Corporation Tax.

With the Chancellor also announcing a further £30 billion of cuts to public spending, government departments in the borough, such as the Home Office at Lunar House, as well as the local council are expected to have to axe up to one-quarter of services and jobs.

This “double-whammy” will have an immediate impact on employment in the borough and the services provided by the Conservative-controlled council.

Local library opening hours, schools and leisure services in Croydon could all be under threat. This week, Sanderstead and South Norwood libraries announced that they will be open for one day less each week, Croydon council saying that it was an “inevitable” result of cuts in spending.

Following the Budget, Croydon council will also have to deal with the impact of thousands more local residents being out of work.

The controversial redevelopment of central Croydon, through the £450 million Urban Regeneration Vehicle with developers John Laing, could be another casualty of the cuts affecting Croydon.

“There’s a council Cabinet meeting in July, and all such matters will be discussed then,” a Croydon council spokesman told Inside Croydon today.

Jeremy Frost, the chairman of the Croydon  branch of the Federation of Small Businesses, said:  “The measures announced in the emergency Budget will go a long way to reducing the deficit and will please the 93 per cent of FSB members who called for a clear plan on tackling the country’s debt.

“The increase in VAT to 20 per cent will however, hurt small firms who will have to pass the increase on to their customers, unlike big business which can absorb the cost.”

The poll conducted by Gauge Opinion was carried out between 4pm and 6pm after the Chancellor had made his Budget statement in the House of Commons. The poll participants were randomly selected from a database of 3.5 million mobile phone numbers and contained a spread of age, gender and region to reflect the UK population as a whole.

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About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
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