We know that the problems at Croydon Council are due to a long history of financial mismanagement and incompetence at the top – including both political parties that have councillors at the Town Hall and the officials working for them.
This has led to catalogue of bad decisions and poor judgement, particularly when it comes to property. From paying way over the odds to build Bernard Wetherill House, to leaving all of the town centre regeneration hopes in the hands of a private consortium who would always put their profits ahead of the borough’s future, through to the disaster that is Brick by Brick.
But Croydon is not unique.
English councils went on a massive £6.6billion commercial property spending spree over the past three years. And just like Croydon, many of those Councils are now struggling to make their budgets add up.
Councillor Richard Watts, the chair of the Local Government Association’s resources board, said £16billion of austerity cuts to local authorities’ funding since 2010 had stretched councils to the limit: “Councils have faced a choice of either accepting funding reductions and cutting services… or making investments to try and protect them.”
And then coronavirus crisis came along, placing even more strain on council finances. Despite Conservative government ministers promising to “do whatever it takes” to meet coronavirus costs, the amount they have delivered comes nowhere near what councils have spent on services during the emergency. Estimates by the Institute for Fiscal Studies put the gap between what the government has provided and what councils have had to spend at £2billion. And growing.
As Phélim Mac Cafferty, the Green Party leader of Brighton and Hove Council, said: “Councils haven’t yet been offered ‘more’ money. They have been handed a sticking plaster for a broken bone.”
He went on to say “News that Croydon Council filed for bankruptcy only weeks ago should come as a warning to Conservative ministers that public services are at breaking point – precisely at the point when they are needed most.
“To steer us through this crisis we don’t just need emergency cash bungs, we need a complete rethink of how funding is provided to local communities, so they can not only survive but thrive in the world beyond covid-19.”
Over the past decade, Conservative-led governments have done everything they can to undermine local authorities and concentrate power in Westminster. We have seen how disastrous this has been through the billions wasted on the Test and Trace shambles and the endless stream of dodgy contracts that have frittered away even more money and failed to deliver the PPE that our frontline NHS and care working heroes need.
This is why the Green Party has been urging the Chancellor to restore council funding to sustainable levels that will protect communities and frontline services.
We want him to fulfil the government’s guarantee to reimburse all covid-related spending. And we want him to announce a review into the balance of taxation between national and local government.
Caroline Lucas, the Green Party MP, has tabled a motion in Parliament backing the Local Government Association’s call for an additional £8.7billion in core national government funding in 2021-2022 to stabilise the sector and sustain and improve service levels.
Lucas’s call has received no response or support from Croydon’s MPs. Croydon’s two Labour MPs seem to have gone into hiding since the council announced bankruptcy and have said virtually nothing at local or national level. As usual, our Conservative MP in south Croydon is just spending his entire time saying how bad Labour is, while taking no responsibility for the mess that he and his government have created.
The spending review yesterday was an opportunity for the Chancellor to listen to our call and restore the funds councils desperately need. But again he failed.
He just announced a bundle of silly schemes to support road builders and property developers, while in real terms cutting the pay of public sector heroes who have been supporting us during the coronavirus crisis.
The money he did announce for councils is nowhere near enough and is just a set of one-off payments that do nothing to fix the long-term problem.
There are plenty of people in Croydon who should take responsibility for the mess our council is in. And past evidence shows there is no point just swapping between red and blue and expecting things to be any better.
We have to sort out the problems in Croydon Council but we also have to tackle the root problem of the government starving councils of funds. With the government’s ongoing failure to fix this, I fear Croydon won’t be the only council to go bankrupt during this crisis. It will just be the first.
- Peter Underwood is the Green Party candidate in Croydon and Sutton in the London Assembly elections next May
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