WALTER CRONXITE examines the budget options likely to be laid out before Monday’s cabinet meeting and at the full council meeting the following week

It’s all over bar the shouting, and there’s sure to be some of that in the Town Hall chamber over the next couple of Mondays, as the coming year’s Council Tax will be set amid the usual third-rate hyperbole from both sides of Croydon’s red-blue political duopoly.

Four months ago, we predicted that Croydon’s Labour council would opt for the maximum increase allowed, and now with Gideon Osborne’s permission to raise a bit more for adult social care, Croydon’s Council Tax is going up 3.99 per cent.

So the Conservatives will talk of yet another broken promise by Croydon Labour, while Tony Newman and his majority group will claim that the local Tory MPs have allowed Croydon to be short-changed by David Cameron’s Tory Government.

It’s all very well, Labour councillors will say, having “a strong voice for Croydon” as your election slogan, as Croydon Central Conservative MP Gavin Barwell did, but if you then spend your time in parliament talking about squirrels more often than speaking up for your home town’s interests, then you’re really about as much use to Croydon as an inflatable dart board.

Barwell argues that he is constrained by his duties as a senior Tory whip. But that’s not a job he had to take, it is argued, as Labour portray Barwell as someone who has placed his own political career ahead of the interests of Croydon.

Or, as none of Croydon’s councillors are likely to remind Barwell  and the Tories in the Town Hall chamber, as Plato once wrote, “The measure of a man is what he does with power.”

But then, that might just as easily be applied to council leader Newman, too.

In seeking election in 2014, Newman’s Labour manifesto made a tax freeze promise which was as ambiguous as it was ambitious. It is sure to be the crux of the usual small town political hysteria on Monday week when the 3.99 per cent increase, the maximum possible without triggering a referendum, will be voted through by Labour’s 10-strong majority.

“Labour has voted to freeze your Council Tax for the past six years and will do so again,” the Croydon Labour manifesto offered two years ago. Tim Pollard and his Tory group will interpret that as meaning that Labour promised to freeze Council Tax for six years. Labour will say it just meant for the first budget that they set last April.

Labour, with its reputation scarred with massive Council Tax increases of 35 per cent in their first ever Croydon budget in 1995 and by 27 per cent in 2003, was keen to reassure the 2014 local voter.

But it is now looking like a foolish promise as, in reality, it is the national Government of Barwell and his Croydon South party colleague, Chris Philp, that is setting Council Tax increases these days. After years of pushing for freezes and giving a little bit of extra cash to reward those councils who didn’t increase Council Tax, Chancellor Gideon Osborne now has turned the traffic lights from red to amber on rises.

There is the 2 per cent rise permitted to pay for social care for the elderly to add to the maximum 1.99 per cent allowed. It is as if the Government has calculated that our council should increase its tax by 3.75 per cent each and every year to 2019-2020.

Pollard’s Tories will complain that this cumulative 16 per cent increase over four years is down to Labour incompetence. This, however, ignores the bigger picture and the Tory Chancellor’s tacit approval.

Which makes Newman’s challenge here a presentational one, something which Labour has struggled with repeatedly since taking charge of the Town Hall, as the message of their Tory opponents is repeatedly being better received by Croydon voters on a range of issues.

For instance, on his leader’s blog, Newman wrote, “I give you my word we will do everything we can to keep delivering value for money, and keep your Council Tax bill as low as possible”, just after announcing that Council Tax is about to go up by the maximum possible. Or does he and whoever writes his column for him think Croydon residents are stupid?

 

ANOTHER LONDON Labour council, Ealing, has decided that it will freeze its Council Tax this year. Ealing’s settlement from government is not that much more generous than Croydon’s. Croydon is 20th among London’s 32 boroughs in amount of grant from Government per head. Ealing is placed just one place above Croydon.

Is money really so tight in Croydon anyway? Newman was able to find £200,000 towards the cost of his pet project, the Fairness Commission, and £148,000 for one forgettable night of cycle racing last June, and they have now confirmed that they will spend around £16.5 million to build a new leisure centre in New Addington.

As Inside Croydon has identified before, like the over-priced Fisher’s Folly, the price tag for the New Addington leisure centre is of the order of £10 million more than similar facilities built for other local authorities in London in recent years.

So much for Newman’s promise that “we will do everything we can to keep delivering value for money”.

There are other signals that the budget prepared under the supervision of Newman’s Fieldway councillor colleague, Simon Hall, is not under quite as much pressure as might be feared. It turns out that the council is now only seeking 45 full-time job losses, much less than the 600 predicted through to 2020.

And there will be £500,000 a year coming in from renting out the top floors of Fisher’s Folly, less the £250,000-plus to be spent on yet more new furnishings and on the cost of displacing staff to other parts of the council’s estate. The income is not much, but it’s a start on trying to claw back the £140million spent on the country’s most over-priced council offices.

The council’s day-to-day spending in real terms (when discounted by RPI) is still well above where it was under the last Labour council, up to the financial year 2002-2003, though not as high as it was once Gordon Brown let loose the public purse strings. Looked at in these terms, boasts about coping in very difficult financial circumstances look overblown. Yes, Croydon has more people to look after than 14 years ago, but the council has also lost all of its spending responsibilities for secondary schools.

Croydon’s capital spending in real terms is much higher than it was in the 1990s and the first decade of this century. Labour’s Croydon Council is continuing to build at the same high rate as the Conservatives did in the last two years of their last administration.

Croydon’s debt will continue to grow as it budgets for spending of £103 million on primary schools, £16.5 million on regenerating New Addington, £2.3million on regenerating Thornton Heath, £925,000 this coming financial year on delivering on Labour’s ambition to make the old Ashburton library into a community hub, £20 million on roads around Purley Way and Fiveways, £9.1million on new homes, £39 million on maintaining the council housing stock, £153 million on major repairs and £23 million on estate new build.

Croydon does get an above average reduction, 33.9 per cent, in its Settlement Funding Assessment to 2019-2020 compared to the average 31.8 per cent reduction across England as a whole.

It is inevitable that Croydon is going to do worse under a Conservative Government that wants to roll back a lot of the reductions in grant to county councils that suffered under the Labour Government and which the Tories were stymied in helping from 2010 while they had the LibDems in tow.

The way in which the Conservatives are more a Cameron county set than a suburban party as they were in the time of the Blessed Margaret has been highlighted by a vote on a report on the local government financial settlement in the Commons on Wednesday.

Barwell and Philp found themselves voting for neighbouring Surrey to receive an additional £24.1 million while Croydon only got £800,000. You could not really expect such ambitious men to vote against their own party, but you would at least have expected to see Philp expressing his reservations in Parliament about a fair share for Croydon. Whip Barwell may not be permitted to speak in the House, but he said nothing outside the Commons, either.

If anything, Barwell has boasted of the reduction of Government support to Croydon which adds up to £201 million, while he’s been voting in the House to give Surrey millions more. And neighbouring Surrey, of course, is a Conservative local authority.

The 11 Surrey MPs, all Tories, have been working together on the county’s grant and have been seen to do so publicly. There is a case to be made for Croydon and it should be seen to be made by any good and effective local MP. But Philp has been distracted by his car crash TV confrontation with Will Self, while Barwell’s public pronouncements are generally restricted to acerbic tweets that belittle his role as an MP. And 140 characters can’t tell the whole story in the complex world of local government finance.

 

CROYDON’S CASE REVOLVES around population measurement and comparisons with how other London councils are treated. Croydon’s £229.28 per head grant due from Government in 2019-2020 looks unfair when compared to a lot of inner London boroughs that have similar social exclusion problems. Lambeth gets £442.77 per resident, Southwark £491.81. Even Kensington and Chelsea, the home of Harrod’s and the King’s Road, gets more than Croydon, at £399.89 per head.

Croydon will have £6 million more funding through the Better Care Fund, but this will involve expensive new tasks for the council and inflation will reduce the value of the totality of that frozen fund by as much as 11 per cent, as measured by the expected rise in the RPI by the end of the decade.

Inflation is a consideration too when looking at the real level of Council Tax. The new £1,218.13 Band D charge will be the highest ever. However, in real terms, allowing for inflation, the highest level of tax was levied by Mike Fisher’s Tories in 2009-2010. Croydon Tories’ florid-faced former leader, who resigned in disgrace after #WadGate, was charging 16 per cent more on Council Tax, allowing for inflation, than is proposed for next year.

If Newman needs to present a points-scoring party argument, there’s plenty of possibilities.

Croydon’s growth means that as well as increased costs, there’s extra income, too. The extra households means that Council Tax will garner an extra £4.75million next year.

A cleverer Labour council, with a council leader who answers Plato’s challenge, might have frozen Council Tax. But modest achievements seem to be the real limit of this “ambitious” council. Croydon’s Labour group reckons that a boundary review will make the council safe for re-election in 2018 regardless of its performance.

No wonder, then, that Barwell has refloated his support for the idea of a directly elected Mayor for Croydon. He’s probably calculated that it might even be just the job for him after 2020, too.

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