The Croydon Economic Development Company has suffered a mass walk-out of directors less than a month before the organisation is set to be wound-up.

When CEDC closes, 60 employees will lose their jobs.

As reported this week by regen.net, 12 directors of the lame duck CEDC quit when Croydon Council refused to provide them with indemnities over any personal liabilities once the business-supporting body is closed.

CEDC has been very active among local businesses, arranging apprenticeship schemes for the unemployed and providing £1 million-worth of vital loans among 80 Croydon firms.

Lord Bowness, Maggie Thatcher’s favourite local councillor when he was leader of Croydon Council, now vice-chairman of CEDC, said, “The Council has made the decision to wind up the CEDC and that is being done by the Council with assistance of its consultants and officers. There is no role for independent directors as a consequence of that.”

CEDC was taken over by Croydon Council in 2009. In June, it lost £2 million of funding when the Department of Communities and Local Government, under the new Con-Dem Government, withdrew £2 million of Local Enterprise Growth Initiative (LEGI) funding.

Croydon suffered the second largest cut in funding of any local authority in London with a total reduction of £5 million in area-based grant funding.

Council leaders decided to axe CEDC last month.

Simon Hoar, cabinet member for regeneration and economic development, said the council was “saddened” by the directors’ decision to leave.

“The removal of LEGI grant, which is part of the Government’s difficult task of reducing public sector spending, has unfortunately undermined the function of the company,” Hoar said.

“Our priority now must be to make alternative arrangements in order to continue the winding up of the company and to make appropriate arrangements for affordable economic development functions to continue. To achieve this, the council has appointed three new non-executive directors,” he said.