Cash-strapped council breaks rent deals with voluntary groups

CROYDON IN CRISIS: Dozens of community centres in the borough which are used and often maintained by volunteers could now face closure as the council ends its rent subsidies. EXCLUSIVE By STEVEN DOWNES

The council-owned Coulsdon Community Centre, managed by volunteers. The council wants to hike its rents, despite an agreement through to 2024

The cash-strapped council has written to dozens of voluntary groups around the borough to tell them that it is to abandon long-standing agreements and will be withdrawing its rent subsidies on their community centres and halls.

Some organisations will be facing rent bills of tens of thousands of pounds which they say they will struggle to pay.

The letters went out last week, just as the council was also announcing that it is to stage a series of “Building Community Partnership” meetings, where voluntary groups are to be encouraged to help provide some of the services which the bankrupt borough is axing.

Croydon declared itself effectively bankrupt in November, with £66million of overspend on its 2020-2021 budget. Earlier this month, the government agreed to hand the council the biggest bail-out in the history of local government in this country.

According to council reports, Croydon provided 19 premises with £245,000 in rent subsidy in 2019-2020. “The subsidy benefits a range of organisations including sports clubs, scouts associations, residents’ associations, youth and community centres as well as larger VCS organisations.”

VCS is councilspeak for “voluntary and community sector”.

The Shirley Community Centre, going from council-subsidised rent to £1,180 per month

On top of the 19 premises, another 51 council properties are used by the VCS in return for “peppercorn rents”, while 47 organisations, using 69 properties, receive discretionary rent relief, costing the council £143,000.

In total, then, these subsidies on the council properties cost the council around £400,000 per year – or what those who work in Fisher’s Folly describe as being a little less than one “Negrini”.

According to council letters sent out last week, and seen by Inside Croydon, those subsidies are about to end, and somewhat abruptly, too.

As one Katharine Street source put it last night, “The council is saying that the voluntary sector can take up some of the slack caused by the cuts, but then in the next breath they’re cutting the legs from under the voluntary sector. It doesn’t add up.”

The letter was sent from what the council calls its “communications and engagement team”.

The letters, dated March 11, admitted that the council is about to break an agreement over rent levels, under which it had promised the various organisation that the subsidies would last at least until 2024.

The letter said, “You will be aware that the council has in recent years sought to use rent subsidies as a mechanism to provide additional support to the sector. In doing so we have offered a 100 per cent rent subsidy to voluntary organisations, in contrast to a number of London boroughs, many of which do not offer any such subsidy at all.

“In line with our commitment, you may recall that the council wrote to you in July 2019 to advise you of our intention to award your organisation a rent subsidy for a three-year period from 1 April 2021.

“Unfortunately, the council’s current financial challenges have meant that we have subsequently had to review all areas of our expenditure – and non-statutory expenditure in particular – and this has included rent subsidy arrangements for voluntary sector organisations. As part of the budget consultation process, rent subsidies were put forward as a possible saving. This has been agreed at cabinet along with other proposed savings.

“In putting this saving forward, it had very much been my hope that it would have been possible to secure alternative funding provision in order that we could continue to offer this facility, even if this was necessarily limited in duration.

“Regrettably, despite our endeavours we have been unable to confirm arrangements in time to be able to make the necessary provision in our 2021-2022 budget. As such, I am sorry to have to confirm that we will unfortunately have to cease offering a rent subsidy facility to you.

“I am acutely mindful of the financial challenge this news will bring to your organisation and that you may not have had sufficient time to look at other options. Therefore, in order to assist you in having more time to review your position, I can advise that we will pay rent subsidy for a further six-month period, commencing 1 April 2021. In the meantime, we will continue to seek to explore possible alternative sources of funding in the hope that we can review these arrangements later in the year. However, if these attempts prove unsuccessful, provision of rent subsidy to you will end in October 2021.

“I am sorry that I am unable to offer more certainty at this time, and I appreciate that this is unwelcome news. As a council we remain committed to exploring ways to support the sector whilst working within the strictures of our new priorities and ways of working, which have balancing our books and living within our means as key tenets. I very much hope that you will continue to help us in our efforts, in order that we can continue to work together to support our residents.”

Marzia Nicodemi-Ehikioya: the vulnerable will suffer

Volunteers and managers of a couple of council-owned community centres who have contacted Inside Croydon say that, “Obviously, we’re going to push back strenuously, but the council seems to determined to spread the pain as much as they can.”

The people running community centres relate that this won’t be the first time that Croydon Council has failed to keep to its agreements.

“They’ve ceased maintaining the centre,” one said, “despite an agreement that they do so. They’re reluctantly covering health and safety imperatives, but things like the doors and windows broken and damaged during a spate of break-ins a year ago, the centre has had to fork out for. There’s water seeping in, causing further damage the walls, internally and externally. The council refuse to fix it.”

In Shirley, Marzia Nicodemi-Ehikioya, a volunteer who manages the community centre there, says that extensive works on the building were carried out six years ago, paid for by residents, not the council, who own the building. “The rear of the centre is falling apart, kept together with nails,” she said.

“I have dedicated 12 years to the centre and will do whatever I can to keep it going.

“We kept the centre safe and alive. Covid has badly impacted us. Does the Council care? Newman & Co squandered money. Now, the most vulnerable will suffer.”

Those running community centres elsewhere in the borough relate similar issues with the council over the maintenance of its own properties, even before Croydon’s cash crisis hit. “Maintenance and repair was proving to be a more difficult issue than it ought to have been,” one said. “It often involved extended pleading and local councillors’ intervention.

Andy Stranack: council has ‘scattergun’ approach

“Now the grant has been withdrawn. But at the same time as they’re pulling the funding for Voluntary Community Sector, they’re sending out invites to a ‘Building Community Partnerships’ event.”

Councillor Andy Stranack is the opposition Conservatives’ spokesperson for communities. He said, “This failing Labour council seems to be taking a scattergun approach and making damaging cuts to the VCS.

“The Labour councillors need to listen to Croydon Voluntary Action and 30 other leading local charities who are calling for a partnership with the council to come up with a long-term community renewal plan for Croydon.”

Read more: Council Tax-payers pay for politicians’ game of cat-and-mouse
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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
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