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