Croydon short-changed by £95m on central grant funding

Council tax form 4The people of Croydon are daily being short-changed by the government, as the borough receives a central grant from government that is £95 million less than our inner London neighbours, Labour-run Lambeth, despite there being 60,000 more people living in our borough.

And according to a council report being considered tonight, Croydon is facing a further 7 per cent cut in grant over the next two years.

Croydon Council leader Mike Fisher made the point about the disparity between the two neighbouring boroughs at the Town Hall last week, providing figures that show a stark and troubling comparison.

Lambeth, with a population of 289,177, receives a total of £229.72 million in central government formula grant (£206.206 million), the preventing homelessness grant (£2.975 million) and early intervention grant (£20.529 million).

Yet despite having a population of 60,000 more people, 349,241 (according to council official figures), Croydon receives £134.262 million (formula grant: £116.006 million; preventing homelessness grant: £1.125 million; and early intervention grant: £17.131 million).

When calculated on the basis of the number of residents, this all shows that Lambeth has managed to negotiate a formula grant worth more than double that paid per person for Croydon.

Main “formula” grant

Croydon £332.17 per head
Lambeth £713.08 per head

Education funds are a separate matter, but the discrepancy is the same. The head teachers and managers in Croydon’s schools are also forced to make do with significantly less than their counterparts over the borough boundary in Lambeth, which gets nearly 40 per cent more per pupil from the Department for Education.

Funding received per pupil

Croydon £5,345.00
Lambeth £7,397.59

Meanwhile, in the midst of the recession – double dip, or is it triple dip created by Gideon Osborne now? – which has been used to justify massive cuts to Croydon, Conservative-run councils in Surrey have seen an improvement in funding from the government.

Figures published last month by The Guardian show that since 2010 there had been a cut in grant in Croydon of £70.88 per person.

Before Call Me Dave took over at 10 Downing Street, the borough’s MPs managed to persuade the Labour government to give Croydon a fairer share of central funding with a massive programme of more than £70 million for economic regeneration. This was swiftly axed when the Conservatives and Liberal Democrats entered office, with devastating effects for the already vulnerable Croydon economy.

Matters seem set to get even worse.

According to a council paper put to Monday night’s cabinet meeting called Budget options: “The Local Government Finance Settlement in January 2011 was for a two-year period up to and including 2012-2013. This resulted in actual cash reductions, after damping in Croydon’s formula grant of 11.2 per cent in 2011-2012 and 8.3 per cent in 2012-2013. Although the settlement did not go beyond 2012-2013 the Treasury’s spending review figures indicated that for 2013-2014 and 2014-2015 Croydon’s Formula Grant (or its successor) would be reduced, in cash terms, by a further 7 per cent over the two years.”

That works out at something like another £36 million-worth of cuts in Croydon in the next two years.

Who to blame for this shoddy treatment for our borough? Mike Fisher’s Conservative-run council must take a large amount of responsibility for its failure to negotiate a better stellement with Whitehall.

However, they have hardly received robust support from Lord Bletchingley, Croydon South’s yachting MP, or from a Croydon Central MP who has failed to deliver the extra civil service jobs to the borough that he promised nearly three years ago, and who recently has been busy with other matters, as he admitted on his own website that he “… spent much of the last few weeks helping to run the Conservative campaign in the Croydon North by-election“.

It will be interesting, then, to see what impact Steve Reed makes as the new MP for Croydon North, since it was during his time as leader of Lambeth Council that he managed to negotiate a far better settlement with central government than anything delivered for Croydon by Fisher, Barwell and Ottaway.

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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
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