Croydon In Crisis: Tory triumphalism over debt disaster

Reaction to the news of the £120million bail-out for Croydon’s bankrupt council, exclusively revealed by Inside Croydon, has been the predictable mix of the politically opportunist triumphalism, mixed with some I-told-you-so, as well as expressions of deep concern for the future for the borough’s residents.

‘Pleased’: council leader Hamida Ali

In a statement issued on the council website late on Friday, Hamida Ali, the council leader, said, “I’m pleased that today we have received government approval of a capitalisation direction that will help to balance this year’s budget and support Croydon’s plan to put its finances back on track.

“Communities Minister Luke Hall has written to us to confirm that it will allow borrowing of £120million – £70million for the financial year 2020-2021 and £50million for 2021-2022.

“The government’s offer, which will help Croydon over the next two years, is conditional on us delivering our renewal plans at pace and providing regular progress updates to the government-appointed Improvement and Assurance Panel.

“Croydon’s Renewal Plan is a major programme mapping out proposed savings, strengthening governance and financial practices, and new ways of working to put the borough on a more sustainable financial footing.

“We welcome this positive decision, reflecting government’s confidence in our robust plans and ability to turn this council’s finances around and transform how it is run for the benefit of everyone in our borough.

‘Sad’: MP Chris Philp

“This means we can now put forward a balanced budget for debate on Monday and it gives us a solid foundation to focus on putting those plans for sustainable finances into practice over the next 12 months.”

That was about as good as it got.

Chris Philp, the Tory MP for Croydon South, said, “It’s sad that things have come to this.

“The Conservative government has had to bail-out Croydon’s bankrupt Labour council. Labour’s shameful incompetence bankrupted the borough, and despite this record bail-out there will still be frontline service cuts.

Back bench Labour councillor Andrew Pelling responded to Philp’s grandstanding on social media when he tweeted, “The council got on to this debt habit under the Tories with ridiculous spend on the council HQ with its £272 taps.

“A lot of the borrowing is for public services, with a huge (and overcapacity) schools programme meeting population growth. But £330million is [Brick by Brick] and asset arbitrage.”

Pelling has been a leading figure in the DEMOC campaign for a directly-elected mayor. “Failed Town Hall governance argues strongly for a directly-elected mayor who might persuade government that funding Croydon as if it’s still a Terry and June dormitory suburb is unsustainable.

“Playing party politics now does not impress voters and your triumphalist tweets beneath you.”

‘Sickening’: Peter Underwood

Peter Underwood, the Green Party’s candidate in Croydon and Sutton in May’s London Assembly election, railed against the Punch and Judy nature of the borough’s political duopoly.

We all know Labour has messed up in Croydon,” Underwood said, “but [Tory] hypocrisy in trying to claim that you are defending public services is sickening.

“The Conservatives have been cutting these services at every opportunity for my entire life.”

The borough’s two Labour MPs, Steve Reed OBE and Sarah Jones, have made no public comment on the position of the Labour-run council since the settlement was agreed. Reed is Labour’s parliamentary front bench spokesperson on… local government.

Read more: Council Tax-payers pay for politicians’ game of cat-and-mouse
Read more: ‘Not good enough’ chair of scrutiny could yet stay in post
Read more: Council handed biggest bail-out in history


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About insidecroydon

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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11 Responses to Croydon In Crisis: Tory triumphalism over debt disaster

  1. CentralCroydon says:

    As you reported more than a week ago, the Quarter 3 financial report that went to Cabinet last Monday was forecasting a potential overspend for 2020/21 of £96.5m. A £70m bail out from the government still means a potential shortfall of £26.5m.

    How the hell are they proposing to save this amount considering the end of the financial year is only 3 weeks away?

    On the face of it, there is no hope for Croydon or its residents. Newman, Hall, Scott and Butler should hang their heads in shame and do us all a favour and banish themselves from public life. It is such a shame that they can’t be surcharged.

    • Charlie Burling says:

      Remind me, did Shirley Porter ever duff up her surcharge?

      And there is a danger here of a few elected members being tried by Lord Chief Justice Kangaroo.

      I think we should wait for the outcome of the Stewards’ Inquiry before hanging the jockey.

      There are ongoing investigations and it may be prudent to await the reports. And you have to have a base line. Most of that debt was inherited and against a background of real-terms and actual cuts in government funding. Keeping all the balls in the air must have been a nightmare.

      Bankrupting a few councillors won’t resolve anything. Now, this is a considered opinion from someone who’s got the T-shirt and can safely say ‘when I was Chair of Finance…’. I also have the benefit of 20:20 hindsight.

      1) Brick by Brick is/was a classic example of the sunk cost fallacy.
      2) The scrutiny function always was a complete joke. The cabinet/scrutiny system allows the majority group to mark its own homework.
      3) There was a failing by senior officers to implement decisions taken by the whole Council as opposed to the ‘vibe’ given out by senior councillors. This has always been a failing in local government.

      The bottom line is that Croydon has to pay down a large debt. That’s it. No one got killed. In public life, things occasionally go wrong. Schools, hospitals, police forces and government at all levels.

      Draw a line and move on. And a word to my old colleagues in Croydon Labour Party: Embrace change, because if you keep doing what you do, you’ll keep getting what you get.

      • miapawz says:

        Croydon taxpayers money has been lost on extremely risky and frankly weapons grade stupid hotel purchases, shopping centre purchases, on the astonishing Brick by Brick, due to incompetent labour councillors – those in need will suffer – e.g. adult social care will suffer. I feel your response is a little unsympathetic to the tax payers… it’s our money after all and we’ll have to pay it back, not Tony Newman (sadly).

        The council should have stuck to doing normal stuff, e.g. emptying bins, and looking after the oldies, not speculative nonsense.

        Shirley Porter was punished in 1989 and is nothing to do with this shower.

        • Shirley Porter was a corrupt local politician who sought to evade punishment. A comparison between her conduct and the behaviour of councillors in Croydon over the last decade is entirely apt and appropriate.

          The Colonnades may not have been such a bad investment: its tenants continue to pay rents which are used to help fund council services, as was the original intention.

          The hotel was found out once covid-19 arrived and the management company which operated it – paying rent to the council – went out of business because they had no paying guests. The council paid over the odds for the hotel, which was unnecessary and stupid. But they now have a very develop-able site which can be sold on the property market.

          It was the manner in which the money for these investment purchases was released – without proper council authorisation – which was contentious and possibly a matter for further action.

      • Former Waddon councillor Charlie Burling asks to be reminded if Shirley Porter ever did “duff up” her surcharge.

        While leader of Westminster City Council, Dame Shirley oversaw the “Building Stable Communities” policy, which involved selling council houses below their market value to families thought likely to vote Conservative. This blatant gerrymandering was dubbed the “homes for votes scandal”.

        In 1996 it was judged illegal by the district auditor, and she was surcharged £27m. This was later raised to £42 million with interest and costs. After fleeing the country and giving her assets to her family, she eventually settled in 2004, coughing up just £12.3 million.

        Ironically, the organisation that brought her down, the Audit Commission, was abolished by Tory Eric Pickles, ostensibly to save £50m a year. That’s a fraction of the bailout Croydon has just received, and a drop in the ocean compared to the value of Covid-related contracts handed out by members of the Conservative government to friends and donors.

        • Charlie Burling says:

          As for surcharging, that only applied if a councillor defied or broke the law. No one has come up with a shred of evidence in that area. What has happened is a combination of over-optimism, a failure to implement decisions in time and a corporate mindset that was hoping something would turn up. Something did turn up: Covid. I suspect that if it wasn’t for the pandemic, they would have swerved the current situation. They would still be making cuts and selling assets, but without all the noise. Another thought: what were the opposition doing? Perhaps they kept quiet because of their own profligacy and their own government cutting funding. Triumphalism when you are actually part of the problem has a name.

  2. If Tony Newman, Paul Scott, Simon Hall, Clive ‘no-view’ Fraser, Fitz-stupid and Alison Butler had not fucked up on the scale they did, the Tories would not have the opportunity to say ‘I told you so’.

    That’s beside the point. It’s not about the Tories. It’s about the legacy of financial burden the aforementioned have heaped on this borough for the next 20 years. And that’s why Ali must remove these councillors from decision-making committees within the council.

    Scan back five years to Inside Croydon’s news pieces and the financial shit-fest we are in now was regularly predicted.

    • Ian Ross says:

      So true. Taking on a bad habit because the predecessor had one is no defence. Ali was part of it despite what she may or may not remember. A clean sweep with a stiff broom followed by a severe pressure wash is what’s needed.

  3. Ian Kierans says:

    Go back a little further and the rot set in with the last Tory administration and fishers folly the cost of that continues. Keep looking and you will see cuts since 2007 all adding to this debt. The Labour administration compounded that by taking a high risk gamble and lost. Lets get away from the Tory/ Labour muck fest as both are culpable. But lets not spare Central Government either nor the Mayors who both have some laundry to do. If the Lib Dems feel secure just look at the fiasco in Sutton. No if we are going to have effective administration going forward it needs to be away from party politic’s and for the interest of the residents and providing services not micky mouse wannabe politicians sucking at the public tit nor overpaid numpties in high overpaid positions that frankly do not add value and have no business being employed in public industry.

  4. The activities of Newman, Hall, Scott, Butler, Negrini deserve our opprobrium. As does the schadenfreude of people like Philp. We are crying out for decent, accountable politicians in both of the major parties in Croydon.

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