Times are tough, as council struggles to make ends meet

Just how can a council such as Croydon keep going when its government grant has been cut by 76 per cent? WALTER CRONXITE reports

Croydon Council is trying to cope with a quarter of the funding it had in 2010

Times are tough in local government. Local government has been hit especially hard by Tory austerity, as national politicians find it easier to pass the dirty work of cuts down the line for the small town politicians to take the blame.

Local Town Hall Tory oppositions, just like Croydon’s, play the tit-for-tat game of blaming majority controlled Labour councils for stretched or failing services starved of proper funding.

But what are the real figures behind a 76 per cent cut in grant that Croydon has faced?

Surely no council can survive on less than a quarter of the funding that it existed on in 2010?

In reality, it is a bit more complex.

At Monday night’s budget-setting council meeting at the Town Hall, in between praising Richard Simpson, the much-missed resources director (or Council Treasurer, in old money), Simon Hall, Croydon Labour’s cabinet finance chief, revealed a more useful number.

How Croydon Council chose to represent its grant reductions in Monday’s budget-setting meeting

The amount of money the council has to spend in recent years is in fact down 14 per cent per person from its peak.

A long series of council questions posed over several years by Labour councillor Andrew Pelling also makes it possible to glimpse at a long-term view on how Croydon’s spending fortunes have changed.

Discounted in real terms by the retail price index measure of inflation, and based on 1995 prices, the council’s gross expenditure is down by almost 30 per cent over four years, since the last year of the Tory council: £645million in 2014 to £455million now.

The central government’s grant to Croydon peaked at £201million under Tony Blair’s government in 2005. Now, it is a paltry £41million (based on those 1995 prices), a whopping 81 per cent fall.

Other funding streams, extra Council Tax – which has been increased by the maximum amount allowed for each of the last four years – and other council charges have had to fill the gap.

But Croydon’s Council Tax is not at its highest level in those adjusted for inflation, real terms. That happened after the financial crisis, with the local Tories in power locally and Gordon Brown at No10 in 2010. Then, the Band D Council Tax was at £952.49 instead of the £845.19 in the 2019-2020 financial year (relative to 1995 prices).

Croydon’s capital expenditure peaked in 2017-2018 at £215million, and will be down at £90million next year (all in those 1995 equivalent prices).

Croydon feels that its grant from government should treat it more like an inner London borough because of its many social deprivation challenges. Hall spoke of gentrified Lambeth’s £425 per head government grant, compared to Croydon’s £219.

Almost £3million in parking income has boosted Croydon’s coffers.

Croydon is in the bottom half of the London boroughs league table of funding from the government

Savings from co-operation across health services in the One Croydon Alliance, copying similar initiatives in inner London, has yielded savings at a time when the government has cut public health money for councils. Increased social care charges are coming.

What could yet blow Croydon off course is demand in social care, and the status of the council’s failed children’s services department, with further Ofsted inspections a growing concern among staff within Fisher’s Folly. The council threw millions of pounds at the problem when children’s services were placed into special measures in 2017, but doubts linger about whether that money has been used effectively.

Brexit is also a worry.

Councillor Hall gets concerned, too, about how the Home Office have said it will not pay for all the costs of unaccompanied children asylum seekers, a real problem for Croydon with Lunar House in the town.

The government’s Fair Funding Review might not help Croydon. Tory shires, some in dreadful financial straits, would benefit more. And would matters for Croydon improve under a Labour government? Or would John McDonnell and a new Treasury team decide that there are more deserving causes in the north?


About insidecroydon

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 inside.croydon@btinternet.com
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13 Responses to Times are tough, as council struggles to make ends meet

  1. derekthrower says:

    See you mention “Croydon’s capital expenditure peaked in 2017-2018 at £215million, and will be down at £90million next year (all in those 1995 equivalent prices).” Is Brick by Brick expenditure stated within the Council’s capital expenditure or somehow place off book in their own special set of accounts?

  2. Thanks for this brilliantly clear explanation of how the system works.

  3. Excellent article explaining how local Councils, not the Bankers who caused the problem, have paid the price in austerity measures. Ultimately the Council Tax pay carry the burden. However the homelessness we see on the streets, the filth and dirt on the roads around West Croydon, the poor provision of home care for the elderly and disabled, the fact it takes a week to even ask for a date to make a doctors appointment two or three weeks hence at the earliest, the lack of community policing and poor policing levels in the Met and the shocking toll in young lives, the cuts in youth services and probably a lot more, should all properly, ultimately be laid at the door of a central government. They are so anxious to save their own jobs that they are so preoccupied with their Brexit splits that they choose to ignore all these social needs, although I am not convinced these needs would ever even figure on their horizons even Brexit apart. I think we need to be made aware of the great con trick that is being played by passing the blame for all these ills on to local government, so, a good and relevant article. It is interesting to note that even Tony (“I carry the scars of local government on my back”) Blair did a far better job in funding local services.

  4. David Wickens says:

    From 2013 Croydon would have retained part of the business rate. Not sure how that affects the calculations but I suspect that the central government settlement grant is reduced, at least in part, to reflect the retained part of the rate. The change was said to be to encourage local authorities to develop their business/non domestic rate element which Croydon has tried, not least through Westfield. Delay to that will have had a significant effect in loss of additional domestic and business rate.

  5. With High Street shopping in such decline in all our towns and cities, the idea of increasing Council funding through the business rate seems a bit of a sick joke.

    • And there were we, George, thinking you were old enough to remember a time when Britain had a range of commercial activities, and industries, and was not solely reliant on its tax revenues from the dependence on retail: a situation created by Thatcher, worsened by Blair. Our modern dystopia.

  6. My first job was on British Railways, so there’s a clue age-wise! What you say is soooo true and after pit and steel closures the rest of the family silver was sold off, only to be “outsourced “ to whichever part of the world had the cheapest labour force. We now live in a world of betting shops and coffee shops and the smiles on our High Street facades increasingly makes them look like they need dentures. We need to realise that many people now shop on line. We need to tax Amazon and the like properly, and support / develop manufacturing and encourage proper work activities for our young. It’s heart breaking to see so many with clip-boards in the precinct, on rubbish commission, making (or probably not making) a living selling charities. Rant finishes – for now!

  7. George Wright says:

    And oh, I wrote a poem about our precinct on this very thing:-

    Would I take dignity down to cold paving stones,
    Hold up my cardboard “I’m hungry, please feed me”
    Stare up at the faces, those deaf to pained groans,
    Those with stern minds, who’d confine me to history?

    Would I? Hopefully not

    Would I let my voice soar out as loud as it could,
    Proclaim the Messiah is coming, you must all repent
    Exhort unhearing shoppers to learn to be good,
    Until the chords of my larynx are totally spent?

    Would I? No, not I

    Would I go into crowds, on a minimum wage,
    With my Red Cross badge or Cancer Care
    Put on a winning smile then try to engage
    “Hey guys, do you have a minute to spare?”

    Would I? I can’t see that I would
    Would I sport a rosette of red, gold or blue,
    Shake hands all around , say my party speaks truth
    Pledge your streets will look brand, spanking new,
    And we’ll care for the sick, the old and the youth

    Would I? I don’t believe I could

    Would I march behind banners, be part of a throng
    Try to stop the bombs falling on the innocent ones
    Would I scream at my Government, sing rebellion’s song
    To see streets without knives, schools without guns

    Would I? That sounds like the person I’d like to be

  8. sebastiantillinger7694 says:

    Council is making ham-fisted financial decisions that are making matters much worse. The Brick by Brick fiasco is a bottomless financial pit. Buying unwanted commercial property of Purley Way recently was a stupid mistake that had the land agents I know laughing all the way to the bank.

    Who’s responsible? CEO jo Negrini.

    It would be more effective if Croydon residents crowd-funded a severance package for her and then kicked her out. The borough should not be exposed to any more mindless spending.

  9. George Wright says:

    Severance package? If “we’re not stupid” was paid by results, she would need to reimburse Council Tax payers on leaving!

  10. David Taylor says:

    It didn’t help Croydon IT manager making off with the grant money ,has Croydon ever got it back!!

    • You may be referring to Harry Singh. He didn’t “make off” with any grant money, but was paid, very generously, for services which it is questionable whether he was capable of delivering, while failing to declare that the exec director who awarded him the work was a close family friend, and godfather to his child.

      Inside Croydon broke the story, and covered the consequences at length: neither Singh, Karen Sullivan, the mother of the child, nor Graham “The Godfather” Cadle work at the council any longer, though that situation may have continued indefinitely had the council chief executive, Jo Negrini, had her way and taken no action. https://insidecroydon.com/2018/02/21/ceo-negrini-threatened-legal-action-to-protect-the-godfather/

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