Bankrupt borough could overspend by millions again this year

CROYDON IN CRISIS: Cash-strapped council is facing another busted budget, according to latest estimates. By STEVEN DOWNES

Bankrupt borough: estimates suggest the council’s budgets are still not under control

Less than six months since Croydon was handed the biggest bail-out in history, following the authority declaring itself effectively bankrupt, and the council is already heading for another budget deficit, possibly by as much as nearly £4million.

According to latest estimates, the council is forecast to overspend its budget by the end of the 2021-2022 financial year by £590,000, even after taking into account use of the covid-19 grant from the government.

Officials at Fisher’s Folly have also identified further risks to the council’s budget which leave a potential overspend of as much as £3.7million by the end of 2021-2022, according to a report in The Municipal  Journal.

Even the smallest of overspends will come as a huge embarrassment – maybe worse – to recently confirmed council CEO, Katherine Kerswell, and her newly installed team of exec directors, as they have their work on the council’s finances checked and double-checked by Tony McArdle and his “improvement board” of government-appointed commissioners who were supposed  to prevent this kind of thing happening.

Katherine Kerswell: finance controls are not working

The improvement board was installed earlier this year as part of the conditions of the £120million bail-out agreed by the Ministry of Housing, Communities and Local Government – £70million to get Croydon out of the hole created last year and a further £50million for this financial year.

Further cash help from central government is conditional on winning the approval of McArdle and the Ministry.

According to The Municipal Journal, “Reduced income from parking and increased costs of special education needs transport have contributed to the financial difficulties, in addition to planned savings totalling £1.7million now being in doubt.”

Getting top-dollar in the fire sale for the likes of Brick by Brick and the College Green development site is likely to have become an even greater priority for Kerswell and her finance director, Chris Buss.

Read more: Council Tax-payers pay for politicians’ game of cat-and-mouse
Read more: Former health director suing council for constructive dismissal
Read more: Council handed biggest bail-out in history

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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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9 Responses to Bankrupt borough could overspend by millions again this year

  1. What is sad is that the desperate need for money, means that Croydon does not get what is best for Croydon, but what will help dig a rackety administration out of a hole they have dug for themselves.
    Will anyone ever want to go into the Croydon of the future. Even the Queen’s Gardens has been brutalised there doesn’t seem to be much left.

  2. This is…unsurprising to me, and I’m sure many others. The (albeit necessary) paltry sums of money lent to Croydon to try and steer away from the £1.5B+ deficit it landed itself in wasn’t going to help much when many of the old boys and girls towards the top of the chain are still swanning about, and no one has really been held to account, or accepted responsibility.

    That responsibility has been put on Croydon Council tax payers and the generations underneath them.

  3. Ian Ross says:

    That Croydon Council was allowed to rack up £1.5b of debt is ludicrous enough and that no one seems to have been actually held responsible is staggering. Katherine Kerswell was supposed to have been “parachuted” in to sort it out yet here we are with the continuing shambles and Brick by Brick still badly run by clowns. Then again, Jo Negreedy was supposed to have delivered a fabulous redevelopment. She did very well out of abject failure, a pattern that continues.
    Jenrick should have been a lot firmer before chucking away more tax payers money.

  4. Ian Kierans says:

    Any Council behaving as this one does, will not attract visitors nor increase revenue . It does not incline even residents to spend within the Borough at all. All income will take a hit so revenue streams will be taken up where they can be – note Development/ Planning revenue ANPR usage and you may being to understand where this is going in the immediate and medium term for increasing revenue streams.
    So who failed to understand that SEN children transport costs would increase in a pandemic? It was noted that Children Social Care funding would grow in the budget
    I suspect there are a lot more costs in the future and known risks as yet to be realised but will be.

    So which Risk Manger failed? I suspect they did not.
    No I suspect that they do not care about £4 million. That risk is reasonably going to be realised but have little financial impact on a council budget. More to the point any mitigation and control could cost more and still have no impact – so why bother?. Social and reputation costs aside that is better to focus on what you can change not what you cannot. Risk can normally take into account reputation social and political factors among others.
    However the Political appears sewn up, the social is close to death and the reputation of this administration has been publicly tanked so many times it has brought the word disrepute into disrepute. no wonder no one wanted the job Kerswell took or appointed into dependent on perspective.

    So does this Council need a Risk Management system? If it does not they might want to save some penny’s and just speculate on the property market – ah was that not the issue with the Strong Leader type having already done this?

  5. What exactly was Katherine Kerswell’s brief?

    Does anybody know?

  6. Lancaster says:

    This was common knowledge inside Fisher’s Folly before the government bailout. The overspend this year was being talked about at about £10m. Expect lots more job cuts imminently while the top table in BWH and the Town Hall take silly money for continued failure and pretense that they have a plan and know what they are doing.

    • Ian Kierans says:

      Four million after three months suggests even the £10 million talked about will be exceeded. We could save £1 million per annum by losing Kerswell and co. I am sure there is enough professional talent with Croydon itself on a voluntary basis to deal with administration and revenue generating. At least then there will be effective management and communication and not much being stated as ”Lost”

      • Lancaster says:

        Agree – Belgium survived and functioned perfectly well for 18 months without a government. The Council would be A-OK and better off without ALL the directors and councillors, it would all run perfectly well. Those at the top table are the ones sodding everything up.

  7. I suspect that more radical proposals might be necessary to solve Croydon’s financial and other problems as the “low hanging fruit” has (should have?) been picked. When Northamptonshire Council went bust they split it into two new unitary authorities. Croydon borders four other London Boroughs and there should be some savings in dividing the area between those four and abolishing Croydon Council. Bromley is already quite large so may be unsuitable for much of an increase. I’m sure something could be agreed but it would take time.

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