CROYDON IN CRISIS: The problem facing Croydon Council as it seeks to balance its books is that, after a decade of Tory austerity, there’s precious little left to cut. STEVEN DOWNES reports
The frustration with the slow pace of progress over the council efforts to reduce the authority’s spending was clear in the memo from chief executive Katherine Kerswell to staff on Wednesday and the report from Lisa Taylor, the chief finance officer, that accompanied her Section 114 notice which declared the council bankrupt.
“Too many of us are still operating like business as usual and are not facing up to our new reality that we are actually in a financial crisis,” Kerswell said.
“I am still not seeing an organisation that is taking the necessary radical decisions to stop all but essential expenditure,” Taylor wrote.
“We have not been able to identify enough savings proposals for this year and next that will help us balance the budget,” Kerswell told staff.
And there’s the rub.
Because after more than 10 years of cutbacks in local authority grants and spending (remember, the global stockmarket crash of 2008 began this whole erosive process to local services), there’s precious little left on the bones of council services left to cut.
When he was the council’s deputy CEO and finance chief, Nathan Elvery (hardly a local government officer with a blemish-free record), after applying the latest round of job cuts to frontline workers would boast proudly that, “Efficiency is in our DNA”. Yes, his staff confirmed, he is a prize twat.
Since Elvery left Croydon in 2016, there has only been further cut-backs in most – though not all – of the council’s operations.
The borough’s schools, through the privatisation-by-stealth policy of academisation, have mostly been outsourced. The refuse collection service is run by contractors. As are its leisure services. There’s barely any council staff deployed at Fisher’s Folly to answer the phones to public enquiries any longer.
Under the provisions of the S114, statutory services, those which a council must provide by law, are protected. But there’s a well-placed fear that even some of those will not be immune from the reduced budgets that are coming.
Council staff are braced for the worst. After a process over the summer which “erased” more than 400 posts and required some compulsory redundancies, they have been told to expect a further “reorganisation”, meaning more job cuts, in a report by the end of this month.
Grant Thornton, the auditors, in their Report in the Public Interest, were critical of the council’s failure to get spending on children’s services under control. After Ofsted inspectors in 2017 declared Croydon’s children’s services as “Inadequate” and a danger to some of those vulnerable youngsters in its care, an extra £30million was found to throw at the problem.
To some extent, that strategy worked.
Eventually, in March this year, Croydon’s children’s services were rated “Good”. Social workers had been recruited, some expensively so through agencies, and caseloads which by 2017 had reached more than 20 had been reduced to a more manageable 12 cases per staff member.
But after cut-backs which started to be implemented in January this year (before Croydon was hit by the cost of coronavirus), workloads in that department have begun to creep up. Last month, Alisa Flemming, the Labour cabinet member who oversaw the disastrous and costly Ofsted report, admitted that social workers’ caseloads in children’s services had already increased by 25 per cent.
Children’s services is a statutory service which even our bankrupt council must provide. It is just that the demand placed on this service, and also on the borough’s adult services, always appears to outstrip the resources available to the Town Hall to deal with them.
Croydon is funded by central government as an outer London borough. Yet figures show that it has many of the deprivation issues, and demands, of an inner London borough.
Cross the street from Norbury into Lambeth these days, and you actually enter a less deprived borough than Croydon. Yet the government hands £210 more funding per person to Lambeth Council each year than to Croydon – a difference of £77million per annum.
And it is the difference between having to issue a Section 114 notice and not.
“The funding system for local government is broken and the government enjoys playing with it,” said Timothy Godfrey, who until 2018 was a member of Tony Newman’s council cabinet in Croydon.
In total, since 2010, Croydon has lost 76 per cent of its central government funding.
“It has been set up to fail,” Andrew Fisher, Jeremy Corbyn’s one-time adviser and a South Norwood resident, tweeted this week.
“This austerity was a political choice,” Fisher said. “At the same time as cutting council budgets, the Tory government gave away billions of pounds in tax cuts to the richest and corporations.
“It meant huge cuts to social care, children’s services, libraries and weekly bin collections (remember those?).”
Now, having had part of the hole dug for them (the rest having been scooped out by a JCB driven by Brick by Brick’s Colm Lacey), Croydon needs to find a way out. And it is clear from this week’s messaging, that is not going to be easy.
There is a real risk that, if budgets for children’s or adult services are stripped back any further, those staff left will be overwhelmed and left unable to cope, as happened before Ofsted came calling three years ago. The whole sorry cycle could just be repeated.
Already, the council’s award-winning Gateway service, which dealt with housing provision and homelessness in the borough, has been cut-back in the first round of “reorganisation” over the summer to the point where it is almost non-existent.
Parks – not a statutory service – were recently taken back into council control, but with only a skeleton department. There’s been no new bedding plants in many of the borough’s parks for months, and most of the staff who are hired on temporary contracts will be laid off over the winter with no guarantee that there will be any work for them come next Spring.
Two-thirds of the borough’s public libraries – which are a statutory service – have been shut since the first lockdown in March. The council now says it cannot afford to reopen those which have been shut; the possibility that some library sites could be sold off for redevelopment – as the Labour council has considered previously – cannot be ruled out.
Sources in Fisher’s Folly say that as well as putting remaining staff on four day weeks – and so cutting their wages by 20 per cent – one other cost-cutting measure being given serious consideration is reducing the frequency of residents’ bin collections from once every two weeks to three weeks.
Rubbish contractors Veolia say that they have been collecting more refuse than ever around the borough and so recently were awarded a contract increase. A move to three-weekly bin collections could reduce that multi-million-pound bill by around one-third. Expect there to be some lame justification about us all recycling more and so not needing collections as frequently any longer.
And then there’s Fisher’s Folly itself.
The cost of the vastly over-priced building, at £150million, has been sitting on the council’s balance sheet like a cold turd since the previous Tory regime allowed John Laing to make their handsome profits. Three floors are already occupied by corporate lodgers in an effort to raise some revenue, but Council Tax-payers have had to fund the interest payments on the building for almost a decade.
When Northamptonshire issued their S114 in 2018, one of the first money-making measures they took was the sale of the council offices, which were promptly leased back for council use. That is being looked at by Croydon, though with two huge snags.
First, the council is unlikely to realise much more than £30million for their prized asset, and that’s even if the commercial property market was stable. But that reckons without covid-19, and a “new normal” with millions of people working from home. Most commercial organisations are seriously reviewing whether they will ever again need large-scale office space.
Finding a buyer for one slightly soiled glass palace in the centre of run-down central Croydon could be a challenge that is beyond even Katherine Kerswell.
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