Croydon Council is set to lose a devastating £25 million more from its central government grant if Labour wins the General Election in May.
Ed Miliband, the Labour Party leader, made a speech in The City yesterday trying to gain credibility with voters on running the country’s finances. This included references to finding another £500 million in cuts from local government.
That could mean a big burden for Croydon’s Labour-run council. To back up Miliband’s speech, Chris Leslie, the shadow chief secretary to the Treasury, and “Uncle Hilary” Benn, the shadow local government secretary, announced that they would “end the complex, regressive and ineffective New Homes Bonus, with the funding reallocated more fairly within local government”.
You have to hope that Labour’s parliamentary candidate for Croydon South, Emily Benn, will use her family connections to help the borough avoid the worst of the loss of the New Homes Bonus. Most likely, Labour nationally will see “fairer funding” as meaning money being reallocated “up north”, to councils that have seen huge cuts in central government funding under the coalition. Croydon council leader Tony Newman, after all, is already actioning a form of that policy in microcosm, making choices to fund projects in the northern part of the borough over spending demands south of the town centre.
The coalition scheme of rewarding councils who allow development has been especially useful to Croydon. Assuming that a Labour government, if elected in May, would not be able to halt the ConDem largesse for Croydon until April 2016, our council will receive £30.62 million in extra funds from government in the five years to April 2016 under the pro-business, pro-development scheme.
Croydon Council might have expected to receive at least £12.57 million a year after April 2016 until the next local elections, in 2018, from the New Homes Bonus.
The loss of these millions is the equivalent of adding 9.5 per cent to the Council Tax bill – about £111 on a band D property.
Kris Hopkins, the coalition’s local government minister, criticised the proposed axing of the New Homes Bonus saying that, “Labour’s call to cut council funding in the form of New Homes Bonus is just robbing Peter to pay Paul, and will mean a return to the bad old days where councils are penalised for building new homes.”
The situation may be even worse for Croydon after comments made by Miliband on a campaigning visit to the borough ahead of his speech.
The visit took Miliband just 50 yards beyond East Croydon Station and was so fleeting that hardly anyone seems to have noticed this trip to the key Croydon Central parliamentary seat that Labour’s Sarah Jones is looking to capture from the Tories’ Gavin Barwell.
Those who had not been briefed by the Labour press team may have thought Miliband was about to do an express shop in the new Sainsbury’s shed bolted on to No1 Croydon.
In fact, he crossed the tram tracks for a photo op in the offices of tech firm Dotmailer. Once there, Miliband took the opportunity to criticise the proposal to keep extra property taxes in Croydon for the Town Hall to spend under the “Our Time is Now” plan to become a “growth zone”.
This is a massive embarrassment to Tony Newman, the Labour leader of Croydon Council, and for Steve Reed OBE, the MP for Lambeth South and a member of Miliband’s shadow team, who both enthusiastically joined forces with local Tories to launch the “Our Time Probably Isn’t For A Bit” campaign earlier this month.
Miliband appeared to have been poorly briefed by his Croydon Labour hosts, as he criticised the proposal, which has already won the approval of Tory Chancellor Gideon Osborne, as a pre-election Tory gimmick.
“We would want to carry that on, but I think it’s probably too little too late for the people in Croydon because they feel they’ve been neglected over the past four and a half years under this government and there hasn’t been the help and support people have been wanting,” Miliband said.
“It’s very well coming on five months before an election and saying ‘remember the people of Croydon’.”
Coming to Croydon
- Concert of Christmas music, St Luke’s, Woodside, Dec 13
- Opera Soiree at Whitgift School, Dec 14
- Friends of the Earth Green Beanfeast, Dec 15 (book by Dec 1)
- Croydon Philharmonic Christmas concert, St Matthew’s, Dec 16
- Spread Eagle’s Christmas Improv show, Dec 17
- David Lean Cinema, Northern Soul, Dec 18
- David Lean Cinema, Hitchcock’s To Catch A Thief, Dec 29
- David Lean Cinema, The Beat Beneath My Feet, Dec 30
- Norwood Society talk: Penge, the making of a suburb, Jan 15
- South Croydon business breakfast, Jan 24
- Norwood Society talk: Crystal Palace and Dulwich, Feb 19
- Norwood Society talk: Charlies Dickens in Norwood, Mar 19
- Norwood Society: Balloons and airships at Crystal Palace, Apr 16
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