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Further £38.4m to be sliced from next year’s council budget

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CROYDON IN CRISIS: Town Hall leadership hoped to keep the latest round of cuts secret until after next week’s referendum, as the consequences of the borough’s bankruptcy start to hit home. EXCLUSIVE by STEVEN DOWNES

While much of the nation wrestles over the removal of the £20 covid uplift for those on Universal Credit, Labour councillors in Croydon have been making plans to axe Council Tax benefits from some of the borough’s most vulnerable – estimated as being potentially worth around £25 per week to some of those who currently receive the discount.

The measure is one of several new, deeper cuts being prepared as part of an additional £38.4million-worth of cost reductions to be implemented in the 2022-2023 Town Hall budget, as Croydon struggles to recover financially from effectively going bankrupt last November.

In the past few weeks, meetings have been held between senior elected representatives of both parties at the Town Hall and Richard Ennis, the council’s new finance director, to lay the groundwork for this latest round of cuts.

MP Steve Reed: driven Croydon Labour’s anti-mayor campaign

As career politician Steve Reed conducts a mayoral referendum campaign that suggests that instead of spending on another politician, the money might be better used on local services, Labour politicians at the Town Hall under Hamida “Apologetic” Ali have been deep in discussions about how to cut more local services in order to mend some of the damage they caused while they were serving under their previous “strong leader”, Tony Newman.

The Labour leadership – Ali, her deputy Stuart King and Callton Young, the cabinet member for not much in resources and little financial governance – had hoped that the pre-referendum “purdah” period might keep the lid on such bad news for the borough for a while longer.

Coming on top of the £44.7million cuts to council budgets being imposed this year, the depth of these latest cuts will certainly not help their case at next Thursday’s referendum vote for no change to the way the council is run.

A recommendation for the permanent closure of the Purley Pool and leisure centre is sure to cause huge dismay to the swimmers, gym bunnies and school groups in the south of the borough who feel that they have been stripped of one of the few pieces of local authority infrastructure in their area.

Cold water: Purley Pool campaigners seem set to be disappointed

The pool has been closed since the first covid lockdown in March 2020, and unlike other council-owned sports and fitness facilities, mostly located in the Labour-voting north of the borough and which have reopened over the course of this year, the doors at Purley have remained firmly locked.

Sources at Fisher’s Folly suggest that Purley had been operating at a loss – £187,000 in 2018-2019 and £123,000 in 2019-2020 – but this was subsidised by better income from other facilities managed for the borough by Greenwich Leisure. The real fly-in-the-ointment as far as 1970s-built Purley is concerned is the £3million-plus capital bill needed for repairs and maintenance to make it fit for continued use.

The Purley town centre site, including a long-empty Sainsbury’s supermarket, is likely to be viewed as a potential asset sale for the council, too.

Urgent surgery: the council’s cost-cutting depends on the local NHS taking on £12m-worth of costs

Possibly the biggest risk in the cuts being proposed for the council’s next financial year is about £12million-worth of adult social care costs, which the council wants to unload to the NHS.

This spending is mainly around the transfer of patients, many of them elderly and infirm, from hospital back to their homes.

The saving would represent almost one-third of the overall cuts proposed by the council’s finance director, but as one Katharine Street source said this week, “Who’s to know if the NHS will say, ‘Yeah, fine, we’ll pay for all that’?

“The NHS’s  budgets have been under huge pressure during the pandemic, too, and this proposal is staking a large chunk of the council’s budget savings on how the NHS’s own monetary settlement with the government pans out.”

Croydon’s cuts programme is the price of retaining local control of the council and warding off a government takeover.

Hamida Ali: hoped to keep budget cuts secret

Croydon issued a Section 114 notice in November last year, effectively declaring itself bankrupt, when it found no way of filling a £67million hole in its budget. An audit report accused it of “collective corporate blindness” that goes back several years, lax financial controls and a weak governance culture which failed to challenge poor spending decisions.

The government agreed a record £120million bail-out, over two years, on the basis that the council would deliver balanced budgets. On top of the cuts already made – with around 400 council jobs axed in 2020-2021 – this next round could be even harder to implement.

Previous proposals to close libraries and reduce the number of children’s centres around the borough have failed to survive a public consultation, leaving even bigger cuts to be made elsewhere.

Thus, like the welfare benefits advice team and graffiti-cleaning service, which were both axed in Round 1 of the cuts, so now the borough’s team of NSOs – Neighbourhood Safety Officers – looks like being ripped apart.

Cover story: NSOs are to suffer a massive cut

For a saving of about £1million per year, the council’s 47 NSOs and environmental enforcement officers are to be whittled down to a staff of just 14. “We will only be doing the bare minimum, those functions which are a statutory requirement,” our council source said.

There is a possibility that the council will seek “private sector partners” to fill some of the gaps, and generate a bit of easy cash, with the return to methods used under the Tories, bringing in a security firm whose bouncer-like staff would patrol the town centre doling out 60-quid fixed penalty notices for minor offences, such as dropped cigarette butts and littering.

The council’s mainstay for generating income, Council Tax, will inevitably be increased next April by the maximum amount allowed by law – 4.99 per cent.

This is likely to be felt hardest by the thousands of households around the borough who currently receive a subsidy from the council that reduces their bills, in some cases allowing them to pay no Council Tax at all. All that’s likely to go now, after Newman and his numpties crashed the council’s finances.

With the council in pre-referendum purdah until October 7, Ali, King and Young have not had to face any public discussion of this latest round of damaging cuts to public services. Conveniently – for them – despite Croydon still facing the twin emergencies of its finances and the pandemic, there has not been a meeting of the full council since July 5 – 13 weeks ago, one-quarter of the year.

They just might have to face the music over the budget when they reconvene at the Town Hall for a full council meeting on October 11 or, more likely, as they hold a cabinet meeting on October 18, when more details of their proposed service cuts should be made available. It might not be until December, when the government’s annual settlement for local councils is announced, that the full picture will emerge.

Tonight,  Jason Cummings, the opposition Tories’ shadow cabinet member for “Croydon renewal”, told Inside Croydon, “The reality of the council’s financial crisis and how it will affect residents is only slowly being revealed.

“For next year we know that £38million of additional cuts have to be found. The details of where the axe will fall should be being made public. Lack of transparency remains an ongoing failing of this Labour administration and the public deserve to know what charges will be going up, which community facilities will be being lost and the services and benefits that they will no longer receive.

“Councillors Tony Newman and Simon Hall may have gone, but nothing seems to have changed. It’s time we were told the full details of what is coming.”

Read more: ‘One of the best’ directors leaves council as Gateway closes
Read more: Newman excludes councillors from emergency budget details
Read more: Councillors were warned of financial crisis months in advance
Read more: Council forced to declare itself bankrupt
Read more: Conflicts of interest, incomplete contracts, unlawful payments


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