Budget-busting 25 quid bribe ignores Croydon’s £1bn debt

simon hallHave you received your Council Tax bill this week? Wonder how Croydon Council can afford to pay out £25 to residents? With the Town Hall having accumulated £1 billion debt in the last eight years, SIMON HALL, pictured, says that, in fact, they can’t

Croydon Council, after eight years under Conservative control, will be spending £30million of Council Tax-payers’ money in the next year just on the interest on loans that have been taken out by the Tories.

That’s £30 million of public money that we, in the Labour group, think would be much better spent on essential services throughout the borough – on keeping our streets clean, well-lit and safe; on crossing patrols for our schools; on building schools; on caring for our older neighbours… The list goes on.

When the Tories took over Croydon from Labour in 2006, the council’s debt was £150 million; in 2014, even the Tories admit that Croydon’s debt has risen to nearly £1,000 million, a less-than-cool £1 billion, including £140million borrowed by council leader Mike Fisher and his colleagues to pay for their palatial new headquarters offices. 

Yet despite having accumulated massive debts in their time in charge, a fortnight ago Fisher and his council presented a budget for the coming year which offered little beyond returning £25 to Croydon’s Council Tax-payers.  Just 12 months earlier, Fisher’s council increased Council Tax, costing the average Croydon household around… £26.

So will you really be any better off? Of course not.

The three stooges? Dudley Mead, Mike Fisher and Steve O'Connell think they can buy Croydon's votes with a measly 50p a week

An election bribe, paid for out of your own money: Dudley Mead, Mike Fisher and Steve O’Connell think they can buy Croydon’s votes with a measly 50p a week

This is why I and my Labour councillor colleagues call Croydon Tories’ £25 Council Tax refund an election bribe.

The Tories are trying to bribe the voters of Croydon with £25 of their own money, to secure their vote at the local elections on May 22. We think this is not only treating the voters with contempt – is your vote worth as little as 50p per week? – but also shows that while the Tories nearly bankrupted the borough financially, they are also bankrupt of ideas for Croydon.

These are tough times for all local authorities, whether run by Tory, LibDem or Labour politicians, because David Cameron’s Conservative-led government has decided to continue its austerity policies for another four years as far as the amount of grant it pays to councils are concerned.

If you look at the rest of Croydon Conservatives’ budget for 2014-2015, it offered nothing new, just a continuation of the same old themes which we at the Town Hall have witnessed over the past few years – more cuts to services (what Fisher likes to call “efficiencies”) and yet more borrowing to pay for the Tories’ pet projects.

Because what Fisher and the Tories have deliberately left unmentioned since announcing their £25 election bribe is that their budget is full of even more cuts to your vital services. The cuts are to front-line services, both in quality and quantity. In particular, the Tories want to make further attacks on the council’s preventative services.

For me, the most shocking Tory cuts are in housing. Some £10 million now sits in the council’s housing reserve fund, accumulated from rents paid by council tenants. That is far more than is needed, yet this has been done at the same time that tenants are being told they can’t have improvements because the council has no money.

Croydon council tenants have seen their rents rise and rise again under this Tory-run council. In 2012, council tenants’ rents increased on average by 8 per cent – nearly three times the rate of inflation.

Last year, council rents were increased again at an above-inflation amount, 4 per cent, the increase “will enable us to continue maintaining and improving tenants’ homes and ensure they remain of a decent standard”, Dudley Mead, the deputy leader of the Tories on the council, said at that time.

And this year, council rents are being hiked by Croydon’s Tory council by another 4.9 per cent – although tenants will get two weeks’ rent rebates in April, again cynically timed for just ahead of the election. The £25 Council Tax bribe won’t cover their rent increase over the course of the year, though.

There are other cuts proposed by the Tories should they get re-elected in May, spread across the whole range of council activities. Early Intervention and Youth Services will see £800,000 cut from their budgets, following similar amounts cut last year and a £2million cut three years ago.

There’s £125,000 being taken out of preventative services for adults, even though it now covers not just older people but other vulnerable adults. This will reduce the services available to the most vulnerable – and ultimately, lead to more people in residential care and more hospital admissions, which will ultimately cost us all more money, not less.

In total, what is proposed includes £2.5 million of “cuts” and £18 million of “efficiencies”, where probably half of that is effectively downgrading of service. More than £6 million is being taken out of adult social care.

And yet Fisher and Mead have accumulated £10 million in the housing reserve fund.

Maybe it is to cover for the waste and incompetence that they have presided over while running our council, like the tens of millions of public money being spent on “advisors”, “consultants”, out-sourced project managers and so on.

Remember the planning chief that the council hired, paying him £1,000 per day? In total, according to their own figures, while making hundreds of council staff redundant as “efficiencies” and then paying out up to £5 million a year in severance packages, on top of that this Tory-run council has been spending around £20 million every year to hire “consultants” and interims, often to do the jobs of the council staff they have only recently laid off.

The latest Tory council budget includes further massive hikes in borrowing. The council’s borrowings were about £150 million in 2006 when Fisher took control of the Town Hall. According to the Tories’ own figures, the council’s debt will be £892 million in 2014-2015, and this “excludes interest payments in relation to BWH”, meaning Bernard Weatherill House, or the new council head offices. And we know that the council borrowed another £140 million for their partners in the CCURV scheme to build that glass edifice.

The interest cost on all of this is £30 million this year, and that’s without the bits that don’t go through the Income and Expenditure Account.

In truth, many of the council borrowings over the years can be justified – such as for new schools. But far too often, Fisher’s Tory council opts for the wrong choices. Such as the £140 million – or more – on the council headquarters. The true cost of this vanity project is still difficult to establish, since the council has kept the contract details a closely guarded secret even from elected councillors. But £140 million is the minimum it seems to have cost based on lots of questions I’ve put into the council.

Among this council’s other bad choices is last year’s Council Tax increase, which cost residents an average of £26 per household. Because Fisher’s council opted to increase Council Tax in 2013, that meant that Croydon was disqualified from receiving more than £1 million per year in grants from central government. And yet again, Croydon Council Tax-payers were the losers twice over as a consequence.

Council tax form 4Even the £25 election bribe dreamt up by Fisher, Mead and Steve O’Connell isn’t all it is cracked up to be. All Council Tax-payers will get £25, right? Oh no.

Many of the borough’s poorest and most vulnerable, such as pensioners on pension credit and people with disabilities, still get full Council Tax benefit. They are also some of the people being affected by the massive cuts in adult social care.

But, suddenly, in an election year, with an administration that has run its course, we see desperation tactics of finding a few quid available in the accounts. Rather than seeing this as something that could help protect services or even develop new ones, to encourage the essential work being done in the youth and voluntary sectors, or help with the challenge of future years, the Tories plan to use it for a tawdry £25 election bribe.

The Labour group is offering an alternative for Croydon, what we are calling “Ambitious for Croydon”.

We set out the key planks in a budget amendment, the figures and details of which were signed off by senior council officers.

Labour has a clear vision for a cleaner, safer and more secure borough that prioritises based on need. We are prepared to make tough choices to ensure that the council is run fundamentally differently to deliver to the people of Croydon.

We make it clear that we would freeze Council Tax this year and next – and that we would never increase Council Tax by more than the rate of inflation.

We are clear that we do not think that the £25 Council Tax election bribe was the right thing to do. Now, we also showed in our budget amendment how the cost of the bribe (worth £3.2 million of public money, in case you were wondering) could have been spent so much better. It could be used to fund CCTV, police and enforcement officers, used to help tackle Croydon’s fly tipping epidemic and our dirty streets.

That money could be used to expand preventative services for older people, to try to avoid some being admitted to hospital and burdening our NHS, or on preventative services with our youth at risk of criminality, again working to avoid many of them entering the criminal justice system.

And so much more. We would also have used some of that £10 million in the housing reserves to accelerate much-needed improvements to council properties, and look to provide some much-needed affordable homes.

Of course, a Labour budget would look radically different to that offered by Fisher’s tired Tories. But, for that, we need to have the time to look at everything and work up full plans. And there needs to be the political willingness and ability, totally lacking from Croydon Tories. That is why, if elected, we will present an emergency budget over the summer.

Our specific budget amendments showed how much could be done, quickly and easily. The measures were fully costed and ensured full sustainability for the measures. No 25 quid gimmicks here. It is a proof of concept of just how much difference would be made by a Labour council.

  • Simon Hall is a Labour councillor for Fieldway ward, and a front bench spokesman on finance

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5 Responses to Budget-busting 25 quid bribe ignores Croydon’s £1bn debt

  1. If Croydon’s streets were maintained immaculately, I perhaps wouldn’t mind so much – but they’re not. On my walk from Waddon to East Croydon station each working day, I see graffiti, litter, a half-finished street lighting renewal project, fly-tipping and a general air of neglect.

    I’m a floating voter, and feel that since the Conservatives regained power in 2006, Croydon has become increasingly shabby; another 4 years would be unbearable.

  2. I feel flattered by the number of thumbs down my earlier comment has attracted – presumably from Tories unable to marshal facts to respond in writing.

  3. Andrew Leng says:

    Well I hope that Croydon residents are going to see the £25 Council Tax rebate, or as it is laughingly referred to on my Council Tax bill, “Council Tax Efficiency Dividend”, for what it is: a cynical attempt by the current Tory Town Hall administration to bribe voters ahead of the local council elections.

    As gestures go it is quite pathetic and shows that Mike Fisher and his Tory chums assume that Croydon residents are so shallow that they can be bought off so easily for a few quid. What mugs they must think the electorate are. Or perhaps they are running scared – UKIP have been active in my local area recently.

    This bribe comes at a time when Croydon Council has overseen massive cuts to funding in support and voluntary services across the borough, which are vitally needed by Croydon residents. As the article mentions, one example is the Early Intervention and Youth Services which will see a further £800,000 slashed from their budgets. So much for investing in the youth of the borough and improving their life chances.

    In terms of cuts to important services, I speak from personal experience because the council is currently trying to cut support to our profoundly deaf daughter, which is proving to be quite a demoralising issue for our family. So I can only imagine the stress and heartache that it is causing to other families in similar positions. Personally I’d rather see services maintained and improved, even if it means raising local taxes slightly. But still – it’s all about the money with this Tory administration.

    Why should we be surprised? There’s nothing like a looming election to get the Tories salivating at the prospect of cutting taxes, even if it means slashing local services into the bargain. On a national level David Cameron is talking about making tax cuts by “further public spending savings” – i.e. CUTS!!!, a mere 12 months before the next General Election. Funny that.

    As for my £25 “Efficiency Dividend”, I refuse to accept the council’s shameless attempt to buy me off. Therefore I am intending to use it to make a donation to a local charity. If readers out there have any worthy causes they think I can donate the £25 to, perhaps they can post a thread, underneath this article?

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