Croydon Council’s mountain of debt and reduced reserves made it one of the country’s least-prepared local authorities for dealing with an emergency such as coronavirus.
The think tank’s report shows some interesting trends for Croydon. While covid-19 has seen Croydon badly affected in terms of infection rates, the borough ought not to have been as vulnerable as some other London councils in terms of relative impact on local employment, revenue generation, vulnerable businesses, the percentage of elderly population…
Kate Ogden and David Phillips, the report’s authors, in their introductory notes state that local authorities “with higher levels of deprivation have residents who appear more vulnerable to the coronavirus crisis on a number of dimensions, potentially increasing service demands and challenges.
“Mental ill-health, homelessness and overcrowding, interventions from children’s social services, and receipt of free school meals are higher in [local authorities] with high levels of more general deprivation. If, as evidence suggests, households already facing challenges and poverty are more vulnerable to the stresses and strains of lockdown and social distancing, the demand for support from [local authorities] and other public services could increase.”
The IFS has devised a set of indicators grouped into different categories:
- Assessed prevalence of covid-19
- Health-related risks
- Housing and family-related risks
- Revenue risks to: Council Tax; Business Rates; Sales, Fees and Charges; and Commercial income
- Financial resilience and commitments
It is in this last category where the management of the Town Hall before the pandemic is laid bare. The IFS report highlights some of the underlying financial issues that were facing Croydon before the pandemic crisis – a lack of reserves, £1.5billion debt, increased expenditure on social services – relative to other councils.
Using the IFS dashboard to look at “risk factors” to compare Croydon with other London boroughs. Our illustration above shows the comparison with inner-city, Labour-run Southwark; scroll through the dashboard and it is difficult to find other councils with as much red ink as Croydon. It all indicates that Fisher’s Folly was much less ready when coronavirus hit than other authorities in the capital.
The only area in which the IFS scored Croydon well is in the “percentage change in level of reserves”, where the council budget proposed increasing its reserves by 22 per cent in 2020-2021. Thing is, that was in the council budget passed just a couple of weeks before lockdown, and which looks certain to be binned by the council’s emergency financial review panel.
It all raises some serious questions about the narrative provided to date by the council’s leadership – Jo Negrini, the chief executive, and her deputy, Jacqueline Harris-Baker, and council leader Tony Newman and his finance chief Simon Hall.
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