CROYDON COMMENTARY: It’s time to take a step back from the council’s financial crisis and look at the bigger picture, says the Green Party’s PETER UNDERWOOD
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.
The Croydon Park Hotel: bought by Croydon Council as an investment for £30m
Why did they do it? Asked by the National Audit Office why they invested in commercial property, most councils surveyed said it was to generate income to fill the gaps in their budgets.
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.”
Phélim Mac Cafferty: ‘public services are at breaking point’
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.
Chancellor Rishi Sunak: his spending review did little to fulfil Tory promises to councils
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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Farcical what the government should do is to strengthen the law around councils borrowing to invest. Plainly in Croydon’s case it was appointment to senior positions by nepotism, the scrutiny was non-existent.
Mac Cafferty and the Brighton Greens should not forget their support, by way of loan, for the i360 tourist attraction which owes the Council approaching £40 million. They ignored strong public opposition that said it wouldn’t be able to repay the loan. The public are proving to be correct. There is a comprehensive article regarding this on the Brighton Evening Argus website today.
What we need is a money tree.
We’ve got one. Have a look at the combined wealth of the top 1000. On the Sunday Times Rich List it is £524.843 BILLION. Enough to pay off half the national debt… That difference between the richest very very few [0.0015% of the population, never mind ”the 1%”] is an obscenity and a crime when so much real poverty and hardship continues to be imposed by our governments. I say imposed because it is clearly within their power to address and change that difference by taxation, So they’d lose 1000 votes…..
I’m all for free enterprise. Successful entrepreneurs create jobs for people and goods and services that we all benefit from.
Entre preneur literally translated means “entering to take” or an “enter-taker”. As in burglary. As with the original meaning of Tory, which was a bandit or thief.
They exploit others for their own profit.
That’s going back a fair bit in English language usage. The current definition given by the Oxford Dictionary for entrepreneur is, ‘a person who sets up a business or businesses, taking on financial risks in the hope of profit’. Many entrepreneurs use their homes as collateral when financing their businesses something top earners in the public sector don’t have the stress of doing – actually it would be a very good idea to introduce this for people running councils, it would definitely improve their decision-making.