28% – Newman leaves his Council Tax legacy to Croydon

CROYDON IN CRISIS: Town Hall reporter KEN LEE reports on how the £104 per year increase in residents’ bills adds up to a whole lot more over the course of the council’s Labour administration

“This budget is an essential part of putting things right,” said Hamida Ali, the old-new leader of Croydon’s bankrupt council when revealing the inevitable maximum 4.99 per cent increase in Council Tax she proposes for 2021-2022.

The Council Tax rise is among the council budget proposals to go before a meeting of Ali’s old-new cabinet tomorrow night. It will be the first budget-setting meeting of its type that Tony Newman, Ali’s mentor and predecessor as council leader, has not been a leading player in since 2005.

But it will offer a summary of Newman’s abject failures as council leader for the past six years.

The Council Tax increase proposed by his successor will mean that the borough’s residents will this year be paying

28%

more in Council Tax than they were up to 2014.

Newman stood down as leader of the council in October, when it was becoming increasingly apparent that the policies that he and his cabinet colleagues had pursued had caused the council’s financial collapse. Last month, Newman and his cabinet member for finance, Simon Hall, were suspended by the Labour Party, pending an investigation into their actions. Things must be very bad indeed.

So while Newman is not directly involved with this latest round of budget-setting, the shocking figures that have been presented in official reports ahead of tomorrow’s meeting and next week’s budget-setting full council meeting are very much part of his toxic legacy to the borough.

Mr 27%: Tony Newman

Before he led Croydon Labour to victory in the 2014 Town Hall elections, Newman had once before been close to the levers of power. That was in 2005, when he was deputy leader and that Labour administration delivered up a 27 per cent increase in Council Tax.   Labour duly lost the local elections the next year.

To Croydon’s Tories, Newman was henceforward known as “Mr 27 per cent”. It became a Katharine Street open joke that if anyone wanted to set light to Newman’s notoriously short fuse, then any mention of “27 per cent” would do the trick.

Therefore, it is utterly apt that the cumulative increase of Newman’s six years in power should, by one percentage point, be even worse than his previous record in office. And Croydon residents will be paying the costs for years to come.

It was huge increases in Council Tax such as Croydon’s in 2005 which led to national government capping the annual increase at 5 per cent. In the second decade of the 21st Century, local authorities in England, when faced with huge reductions in their funding from Tory-led central government, have gone into the annual Council Tax-setting process with a sense of inevitability that the figure they will come up with will be 4.99 per cent, the legally approved limit.

For ease of reference, with variations in Council Tax across the various sizes of property, a single “middle of the road” band – D – is often used to illustrate the changes in the local authority’s charges.

Possibly because of the increased attention that Band D gets, there is a suggestion that some councils might favour properties in that band by suppressing increases there, while tweaking the figures for other bands to balance out their need for increased income.

As our table above shows, that might be the case in Croydon.

But if you take the overall increase figures, in 2014 Croydon Conservatives lost control of the borough when the overall CTax figure was £1,470.39.

After a couple of years of “good intentions” from Newman and Hall, when that overall Council Tax figure actually fell by a few quid, there has been close-to-5 per cent increases each year since 2017, leading to the situation from April 2021 when that base-line bill will have reached £1,888.15.

An overall increase in the seven years since Newman took charge of £417.76 – or 28.41 per cent.

Truth is, after Newman’s six-plus years of bungling mismanagement and hubris as leader, the council now needs every penny it can get.

The Council Tax proposals going forward tomorrow break down in the familiar pattern: 1.99 per cent maximum increase plus the government-encouraged 3 per cent rise to pay for the ever-rising costs of adult social care.

Once the increase in what we pay to the Greater London Authority is factored in, it means that “typical” Band D households in Croydon will be paying £104 more in 2021-2022 than they did in 2020-2021.

On a journey: Hamida Ali

And that’s all provided that the government plays nice and delivers up permission for a tide-you-over loan arrangement to plug the council’s £66million covid-19 emergency overspend last year.

“Setting and, vitally, delivering this budget is the council’s absolute priority and will be a whole organisation endeavour,” was the gobbledegook offered up by Newman’s successor, Hamida Ali, to explain the sixth successive increase in Council Tax for the borough’s residents.

“We have recognised the serious nature of our financial situation and our total focus has been, is and will continue to be on putting things right. This budget is an essential part of doing that.”

Ali also resorted to the excruciatingly dull and clichéd “journey” formulation: “Over the past few months we have had to make some hard choices and we know we will have more to make. There is no overnight fix to Croydon’s challenges, this will be a three-year recovery journey to achieve a sustainable budget position by 2024.

“I am determined that we will continue doing all we can to get the council back on a sustainable financial footing while making sure that we continue to deliver quality core services for our residents.”

Read more: Council Tax-payers pay for politicians’ game of cat-and-mouse
Read more: Council forced to declare itself bankrupt
Read more: Officials to investigate possible wrong-doing at council


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News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
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3 Responses to 28% – Newman leaves his Council Tax legacy to Croydon

  1. Wendy Hall says:

    What about all that extra Council Tax coming from the all those flats approved by Newman’s cronies? And whatever happened to all the CIL raised. Don’t see much evidence of investment.

  2. Gary Sutton says:

    The comparison to 2005 is a good one. However your interpretation of ‘just band D’ is completely wrong. The table contrasts just the ‘core’ increase allowed (2% most years recently) with the more relevant increase that include the Adult Social Care precept increase. Also Croydon’s increase has been around the maximum allowed in recent years, which is true for almost every council in the whole country since for the last 5 years.

    • We’re waiting for MHCLG figures, but expect that 99 per cent of local authorities in England will opt for the maximum-allowed increase this year, following last year’s coronavirus spending.
      The Tory government has sub-contracted out tax increases.

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