Tory Chancellor cuts £45m from Croydon Council’s funding

CROYDON COMMENTARY: The Tory Government sneaked out some bad news for local authorities just before Christmas, and it is leaving Croydon Council seriously short-changed, says Councillor SIMON HALL

What's he got in there for Croydon? Not enough, according to Simon Hall

What’s he got in there for Croydon? Not enough, according to Simon Hall

The draft local government financial settlement was announced a week before Christmas, on the very last day that the House of Common sat in 2015.

I can understand why the Government wanted to bury the news. It was certainly bad news for Croydon.

The Tory Government would have you believe that Croydon Council’s “spending power” is only going down £1.3 million over the next four years in cash terms. So, why am I saying this is bad news?

The first clue is the £45 million reduction in the main grant made by the Government to Croydon, in the face of increasing population and increasing demand on services. Overall, that’s a 34per cent reduction in funding to this borough. The biggest reduction is in the next year (2016-2017) – £18 million.

The main way that Croydon Council’s “spending power” would be maintained, according to Government, is an assumption that the council will implement a 2 per cent Adult Social Care precept each year and a 1.75 per cent rise in core Council Tax. The Chancellor, George Osborne, in his Autumn  Statement in November, said that adult social care funding needed to come from the tax-payer, but he has outsourced that tax rise to the regressive tax that is Council Tax.

The Conservative government has continued the policy of the previous Tory-led coalition of failing to recognise changes in need when allocating funding. The local authority funding formula was frozen in 2012, but Croydon is a fast-growing borough. So, as things stand, by 2020, Croydon will be getting no government funding for 1 in 5 of its population. Putting to one side the past, the forecast population growth (together with an ageing population) will add £20 million to Croydon Council’s needs.

Forecast inflation adds another £20 million. And there is a lack of certainty over some of the other funding streams – like public health and funding for new schools.

What is more, we do not know fully the implications of all sorts of other elements of the Autumn Statement or other legislative changes. But it is already clear that the changes made on welfare reform and housing will add to the council’s financial pressures.

It should be said that the Government’s announcement was in line with the assumptions we had been making when preparing the council’s own budget options.

So, what is our response? We have decided to take the following measures:

  • Campaign for a fairer settlement, both on individual items and overall, working with others where there is common interest
  • Focusing on our growth agenda
  • Building on our achievements, including investment in regeneration and London Living Wage
  • Make tough but fair choices in the budget, including service innovation, reduced back-office costs, increased income generation, better use of assets
  • Look at where devolution options provide a real opportunity
  • Make sure that the people of Croydon know the choices the Conservative Central Government has made

The Tory onslaught on local government continues with funding to local authorities, such as Croydon, again suffering the biggest cuts of any part of Government.

Croydon’s two Conservative MPs, Gavin Barwell and Chris Philp, have backed the overall cuts and the failure to correct the unfair funding formula and so they must take responsibility for the consequences.

Meanwhile, this Labour council is committed to delivering to the people of Croydon notwithstanding the financial pressures and it has the clear plans to do so. But what it is also clear that if we were treated fairly, so much more could be done for the people of Croydon.

  • Simon HallSimon Hall, pictured right, is a Labour councillor for Fieldway ward and is the cabinet member for finance and treasury
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1 Response to Tory Chancellor cuts £45m from Croydon Council’s funding

  1. Simon is right to draw attention to the cuts to local government funding. They’re hitting essential services and damaging the fabric of society.
    As Jeremy Corbyn and John McDonnell have said “austerity is a political choice”. There is no economic case for the swingeing cuts the Tories are making. It is all about the Tories’ desire to reduce the public sector.
    As to the Labour Council’s response I would add to Simon’s list:-
    1. Campaigning against the austerity agenda as a whole, not just the settlement which Croydon has received.
    2. Organising petitions when particular services are cut, calling for the Government to restore grant to enable them to continue. An example of this is the ending of the free green waste collection.
    3. When the Council has no alternative but to make cuts, they should include a reduction to their own benefits. A 10% cut in councillors’ allowances would be symbolic but would show solidarity.

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