Council goes to Minister with begging bowl over cash crisis

Croydon is ‘Teetering on the brink of bankruptcy, partly as a result of its investment in property’, and facing a financial bail-out from Whitehall which will come with strings attached – possibly even including the forced resignation of Labour’s council leader

Croydon Council, the Oliver Twists of English local authorities…

Property Week is reporting that Croydon has got the begging bowl out, going to the Ministry of Housing, Communities and Local Government calling for urgent financial assistance over a cashflow crisis which the chief executive Jo “Negreedy” Negrini has tried to pretend did not exist.

Inside Croydon first reported the cash crisis at the council in May, after just two months of dealing with extra spending because of covid-19.

The unbudgeted additional spending, of more than £62million in a matter of weeks, had seen Croydon forced to call in a special team of accountants and outside financial advisers.

Since then, Negreedy and the part-time leader of the Labour-run council, Tony Newman, have repeatedly stressed that Croydon has not had to issue a Section 114 notice, which would be an official admission that the council is broke. In briefings to staff, as well as Labour and Tory councillors, the chief exec has even denied that there was a cash crisis.

The trade magazine’s report strongly suggests that Negrini and Newman have not been telling the whole truth about the seriousness of Croydon’s financial troubles.

Under pressure: council leader Tony Newman

Sources at the council suggest that if the council is able to get any sort of settlement from Tory government minister Robert Jenrick’s MHCLG, it is likely to come with many strings attached. Terms, one council source says, are “expected to be extensive and onerous”.

These might even include the expectation of Newman’s resignation as council leader.

The council, which has accumulated debts of £1.5billion, is also likely to be compelled to liquidate its “assets”, which potentially could see the sale of commercial properties such as the (now closed) Croydon Park Hotel and Colonnades leisure complex. The future of land and property handed over to Brick by Brick, the council’s loss-making developer, could also come in for closer scrutiny.

The trade magazine reports, “A source told Property Week that the council was teetering on the brink of bankruptcy, partly as a result of its investment in property.”

Up for sale? the Colonnades complex on the Purley Way

The PW report covers territory which will be very familiar to Inside Croydon’s loyal reader.

They report a council spokesperson trotting out the tired old line about “historic government underfunding”, but importantly also admitting that Croydon is “facing unprecedented financial pressures brought on by covid-19, which has seen plummeting income and millions in extra costs”.

PW also got the council to confirm that, all Oliver Twist-like, it had deployed the municipal begging bowl.

“Croydon has contacted the MHCLG to request greater flexibility to use capital funds towards revenue pressures this year,” the spokesperson is reported as saying.

“At the same time, our leadership continues to push ministers for a fair deal for Croydon on both historic underfunding and our covid-19 shortfall.

“The council has taken a proactive approach in tackling these issues head-on, including setting up a finance review panel, freezing recruitment and undertaking a staffing review as well as looking to make further savings as part of our medium-term financial strategy.”

Under the “staffing review”, at least 400 council workers are facing redundancy.

Property Week also reported that a certain local news website had broken the news that “Negreedy” was soon to be leaving her job as chief exec.

The wrote, “Last week, Inside Croydon reported that the council was ‘in disarray’ and that council chief executive Jo Negrini was poised to leave her role at the end of September.”

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
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9 Responses to Council goes to Minister with begging bowl over cash crisis

  1. Sebastian Tillinger says:

    Where is Newman? Croydon Council is in turmoil and there’s not a peep.

    Strong leadership, as a minimum, means making a peep.

    Newman needs to stop talking about Croydon City of Culture – that‘s a pre-pandemic whimsy – he needs to start talking about his vision for Croydon mid and post-pandemic. That’s leadership.

  2. Moya Gordon says:

    £1.5 billion of debt. That’s disgusting. Where has all the money gone?

  3. To put the debt/borrowing by the Council in perspective, that is about £3750 for every resident of the Borough. £15,000 for a typical family of four – obscene?

  4. Dan Kelly says:

    Any chance they can disqualify and surcharge the councillors like they did with Lambeth in the 1980s?

  5. Liza Dodd says:

    Make the council sell all known assets like a business bankruptcy with only cash to run service delivery and be on call to government on all its spending plans.
    It needs to remember it is not a bank or a footsie 100 business listing.
    It is there to service the community first and foremost!

    Council dabbling in property development and messed up??
    They clearly don’t have the right experts in its ranks to gamble with other peoples money and make money like other house builders who happen to be….. raking it in.

  6. Joe says:

    Hiding business debts??
    All sound familiar.
    I just thought it was rogue greedy banking and corporate executives who do all that then tumble and crash.Guess the council has learnt some really bad habits along the way.

    How deep this council has fallen.
    Disillusionment and lied to comes to mind from staff and public alike.

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