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Council hands Jenrick a begging letter asking for £150m

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CROYDON IN CRISIS: The council’s old-new leader faces an agonising wait – and probably another Section 114 notice by December 23 – as Whitehall ponders over a multi-million-pound loan. By KEN LEE, our Town Hall reporter

Hamida Ali: left to wait on MHCLG decision

Croydon’s Labour-run Council confirmed this afternoon that it has handed in its begging letter to the Tory government, asking local government secretary Robert Jenrick for a £150million bail-out.

A council statement said that the old-new leader of the council, Hamida Ali, “has requested the loan from the Ministry for Housing, Communities and Local Government (MHCLG) so Croydon can balance its budget by the end of this financial year and cover future deficits”.

The council, with debts of £1.5billion already and dangerously low reserves, issued a Section 114 notice last month to effectively declare itself broke. Croydon is only the second council in 20 years to issue a S114 notice.

The notice was issued because the council is unable to balance its budget in this financial year, with a shortfall of at least £66million.

Senior Katharine Street figures say that they don’t expect to get a decision from Jenrick or the government until the New Year – meaning that the council will have to prostrate itself again and issue a Section 114 notice, its third, just in time for Christmas, on December 23. By the time MHCLG makes up its collective mind, there might even be a fourth, as S114 notices have to be issued every 21 days when a local authority is not able to balance its budget.

“I don’t think Tory ministers want to make this easy for us,” said the source.

No hurry: Tory local government secretary Robert Jenrick

The government bail-out is needed even though the council is in the process of making swingeing cuts to services and axing nearly 600 jobs.

The council has requested a capitalisation direction of £150million, the council said, “£70million of this is to cover the current financial year deficit, and an additional £80million to cover the period from April 2021 to March 2024”.

In a press release issued from the propaganda department at Fisher’s Folly, they said, “The council has made the request to MHCLG to resolve the council’s second Section 114 notice, which was issued on December 2 after the borough’s Section 151 officer ruled it would not meet its legal duty to balance its budget for the financial year 2020-2021.

“After the first Section 114 was issued in November, the council had already imposed restrictions on all new, non-essential spending. Essential spending that continues includes protecting vulnerable children and adults, keeping the borough’s streets clean and safe, and Croydon’s ongoing pandemic response.

“The submission to MHCLG sets out the council’s current financial position, its three-year forecasts and details of the Croydon Renewal Improvement Plan.

“This plan includes proposed savings subject to a current public consultation, as well as the borough’s new priorities, performance management systems, monitoring and ways of working following over 400 recommendations including from external auditors and MHCLG’s non-statutory rapid review panel.

“The council is also consulting on an externally and independently chaired Croydon Renewal Improvement Board, subject to MHCLG’s requirements.”

Hear Croydon’s old-new leader Hamid Ali explain her plan for fixing the council with this recent radio interview:

https://insidecroydon.com/wp-content/uploads/2020/11/Hamida.mp3?_=1

Read more: What is a S114 notice? What will it mean for the council?
Read more: Jenrick orders urgent inquiry into ‘unacceptable’ council
Read more: Council ignored five warnings on reserves
Read more: Council staff ‘are angry, upset and want answers’


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