£83m: Council counts the cost of coronavirus emergency

The Town Hall borrowing millions of pounds more, only 1 in 5 council staff able to work in Fisher’s Folly, local businesses ‘on their knees’, and a ‘tsunami’ of mental health cases presenting at GP surgeries are just some of the drastic changes facing Croydon, as KEN LEE reports

There will be many changes to how the Town Hall operates after covid-19

Croydon will emerge into a changed world as the covid-19 lockdown eases.

The council’s finances were already known to be fragile and are now undergoing an urgent review of what cuts are needed.

The parlous extent of the situation was explained to a scrutiny committee of back-bench councillors this week, when they were told that the government is covering only £19.9million of the £82.6million that Croydon Council has either spent to deal with covid-19 or has lost from reduced income.

Just weeks earlier, the council had agreed a budget of £280million for the 2020-2021 financial year.

So this £62.6million “black hole” in the Town Hall finances is the equivalent of 22 per cent of the council’s net budget and 9 per cent of its gross budget. Jobs and service cuts are inevitable, with the size of the cuts dependent on whether or not the government honours its promise to cover local councils’ emergency spending.

CEO Jo Negrini: has implemented the recruitment and spending freeze that a S114 order would require

“This is a very, very challenging time for all councils and Croydon is absolutely no exception from that,” the four-hour meeting was told by Jo “We’re Not Stupid” Negrini, the council’s very well-paid chief executive.

“We’ve put in place exemptions on all parking across the borough, we’ve also ensured that there is support for council tenants and commercial tenants who were really struggling in terms of council tax and business rate relief. A whole package has been put in place which means we’ve lost significant income,” Negrini said.

Croydon has increased its reliance on short-term borrowing from other local authorities to £441million, made up of loans from 67 different councils. Even as recently as the end of December last year, Croydon’s short-term borrowing stood at £295million. Borrowing has been easy and at modest interest rates, the councillors were told.

Lisa Taylor, the finance director responsible for blowing the whistle if the council runs out of cash, told the committee that, “We have arranged to borrow a further £141.5million from other local authorities to refinance maturing debt, which will include pre-existing Public Works Loans Board loans and some of the short-term debts included in the £440million.”

The money, Taylor said, “is used to refinance maturing debt; it represents reserves such as capital grants unapplied; it is used to finance capital expenditure; or as working capital. There is a cap on borrowing set as part of the prudential framework and the treasury team borrows according to the needs of the authority for liquidity”.

Tough job: finance director Lisa Taylor

Negrini and the council leader, Tony Newman, were adamant that the council will not need to issue a Section 114 warning notice that the council is running out of cash.

“We have significant pressures but we have a very strong team making sure Croydon will not find itself in 114 territory,” Newman said.

“We are absolutely delivering a plan to make sure we protect frontline services. We shouldn’t pretend that it’s easy, we’re going to have to make tough decisions on where money is spent.”

Council services will be delivered entirely differently after the lockdown, with what the chair of the scrutiny committee, Sean Fitzsimons, is calling “an increased emphasis on locality working”, because “social distancing requirements mean that new ways of working are required”.

What’s meant by this councilspeak is that – less than a decade after spending £150million to build a single council office block to accommodate most of its staff – the council will soon be sending staff off to work at six “localities” around the borough: Fisher’s Folly simply cannot accommodate more than about one-fifth of the council’s staff in this new, post-pandemic age.

The localities are likely to use some of the borough’s public libraries, in a move made necessary because what some insist on calling “Bernard Weatherill House” can only now accommodate a maximum of 375, according to Negrini. Hot desking is no longer an option. Staff will instead either work from home or be encouraged to drop-in to libraries to work there.

Fisher’s Folly: only1 in 5 staff will be able to work here post-covid

The damage to the local economy has been devastating, with Negrini saying that businesses based in the borough’s district centre “being on their knees”.

If patients go to Mayday Hospital, they will see things very much changed there too. NHS Croydon chief Martin Kershaw says that the hospital will be broken down into exclusion zones to reduce the risk of the spread of covid-19. Patients going in for surgery will need to self-isolate for 14 days beforehand and again for 14 days after the hospital visit.

Croydon care homes are keeping going with only one small home known to be wanting to close. Homes though remain exposed to covid-19 discharges from hospitals, with patients going into care homes before their covid test results come back from St George’s 48 hours after tests are dispatched from Croydon University Hospital for analysis.

Croydon’s people are marked too by the crisis. Croydon’s top GP, Dr Agnelo Fernandes, said that surgeries are seeing an increase in patients relating mental health concerns and he predicted a “tsunami” of mental health cases to come.

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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2 Responses to £83m: Council counts the cost of coronavirus emergency

  1. Dave Scott says:

    Now is the time for the leadership to show they care about the town, constituents and employees. Whilst it won’t make much difference I would have a great deal of respect if the executives took a pay cut. It may just save a few employees and/or services.. Councillors also could do with cutting expenses. Lets see if a generous gesture is made, or if like many bosses the less able are thrown under the bus.

  2. sebastian tillinger says:

    I have no confidence in Jo Negrini.

    Negrini, had zero experience running a local authority before Tony Newman appointed her to the top job at Croydon. She is basically learning on the job and appears to bring nothing to it.

    To say: “This is a very, very challenging time for all councils and Croydon is absolutely no exception from that,” ignores the very poor state of the Council’s finances, pre-covid, under her leadership. Other councils are struggling but there are NO other councils with the debt burden we have in this borough.

    Our borrowings from other local authorities is approaching £0.5billion! Can Jo Negrini explain why they have money to lend and Croydon is on its knees?

    I’ll open the question up. If anyone can name one original idea that Jo Negrini has come up with and implemented and it has not fallen flat on its face or fizzled away or been authored by somebody else, I will donate £500 to the charity of your choice.

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