The collapse of Croydon Council’s finances got a debate all to itself at the House of Commons last week. But two of the borough’s three MPs didn’t bother to show up.
Adjournment debates are a peculiar piece of parliamentary procedure, in which an MP makes a speech on a pressing matter of the day, and a government minister then makes a response.
In the case of the debate called by David Simmonds, the Tory MP for Ruislip, Northwood and Pinner, it was a blatant attempt by the Conservatives to rub Labour’s nose in the mess of Tony Newman and Jo Negrini’s making in Croydon.
Had either Steve Reed OBE, the MP for Croydon North, or Croydon Central MP Sarah Jones, wanted to attend the debate and make suitable interventions to defend their Labour-run council’s record, they could have turn up and, after catching the Speaker’s eye, might have made a point of order intervention on behalf of their erstwhile chums and colleagues.
But they chose not to.
In fact, for much of the 30-minute duration of the debate (which you can read in full in Hansard here), the Labour benches in the Commons chamber were empty. No one, it seemed, wanted to defend the indefensible. The Tories were talking to themselves.
Here was the “Mother of Parliaments”, in the middle of the coronavirus pandemic and with the clock ticking on Brexit, devoting its time to a transparent effort at party political point-scoring. And politicians wonder why the public holds them in such low esteem.
Simmonds’ 15 minutes of (not much) fame saw him, inevitably, call for a Conservative administration in Croydon – presumably, the Tory MP is unaware that on leaving office in 2014, his party colleagues had left a debt of £1billion on the borough’s books following their own misadventures in commercial property, such as the vastly overpriced Fisher’s Folly.
Simmonds even gave the former Woolworths store manager and Croydon councillor, Jason Cummings, a namecheck. Perhaps the MP didn’t know that the leader of Croydon Conservatives is, in fact, Jason Perry.
But did Simmonds really intend to highlight that a promised planned 4.5 per cent rise in local authority funding next year under his Tory government will still leave a covid-caused funding gap for most councils?
The party loyalist then went on to claim “councils’ financial resilience should not be compromised” by the cost impact of coronavirus. Which of course is bunkum. It’s just that there was no opposition MPs in the chamber to challenge such nonsense.
It was not long before Simmonds turned to Brick by Brick, Croydon’s loss-making housing developer, and its part the council’s collapse.
This is now part of parliamentary record: “It is noteworthy in the case of Croydon that, unusually, the local authority has loaned a housing subsidiary of around £220million of capital — borrowed money — of which a total of zero has been returned against a reported business plan to return £110million by today,” Simmonds said.
“Clearly, that knocks a very significant hole in its budgetary position. As it went into the covid crisis with a capital debt of £1.5billion, by far the highest in London, it is clear that, although capital borrowing to invest in assets and services is no bad thing, it does impose borrowing costs on Council Tax-payers — in this case, about £43million each year.
“That is compounded if those business plans go wrong.”
Referring to “a burst of speculative property investments”, Simmonds said, “It is clear that diversion of resources into servicing debts that are not generating their planned returns on such a scale was a significant part of the problem and created a very weak financial position going into the covid outbreak.”
Simmonds called the £66million budget shortfall in Croydon this financial year “a cash-flow problem on a massive scale, distinctly out of proportion with anything that we have seen in any other London borough”.
Responding on behalf of the government was Kelly Tolhurst, the parliamentary under-secretary for housing, communities and local government. As such, she is likely to be among those who will be going through Croydon’s submission for a £150million bail-out.
Given the tone of her response in the debate, the MHCLG may not be entirely sympathetic to Croydon’s appeal. “Labour recklessly gambled hundreds of thousands, even millions, of pounds of taxpayers’ moneys on disastrous commercial property ventures,” Tolhurst told the House.
“I can reassure Members that the Secretary of State will take a keen interest in the steps the council will need to take to address the governance and financial management issues that have been identified through the independent review, ensuring that the residents of Croydon receive the services they have every right to expect,” she said.
The residents of Croydon North and Croydon Central might expect to be better represented in the House, too.
Read more: MP Reed discovers 20-20 hindsight over council finances
Read more: Council hands government a begging letter asking for £150m
Read more: Jenrick orders urgent inquiry into ‘unacceptable’ council
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