CROYDON IN CRISIS: The borough with one of the biggest Council Tax bills in London has just been given permission to make those bills even bigger. Much bigger. EXCLUSIVE by STEVEN DOWNES
Croydon, under Tory Mayor Jason Perry, has been given permission by the Tory government to raise Council Tax by an inflation-busting 15per cent from April, as the borough’s long-suffering residents are once again being expected to pay for the failures of their politicians.
Katharine Street sources suggest that because Mayor Perry issued his pre-emptive Section 114 notice in November, saying that he would not be able to balance the council’s budget for 2023-2024, Croydon will now have no alternative but to impose one of the biggest Council Tax hikes seen in this country for more than 40 years.
Councils in Thurrock and Slough, also on government minister Michael Gove’s “naughty step” for not managing their finances well enough, are being allowed to increase their Council Tax from April by a “mere” 10per cent.
Local authorities have their annual Council Tax increases routinely capped at 5per cent – 2per cent towards the costs of providing adult social care, and 3per cent on other expenditure. Councils that want to increase Council Tax by more than those levels are usually obliged to hold a referendeum. Today’s announcement waived the referendum requirement on Croydon, Thurrock and Slough to do that.
Croydon residents are already burdened with one of the biggest Council Tax bills in the whole of Greater London. Now, less than 12 months after Perry became the borough’s first elected Mayor, he will preside over a Council Tax increase that will see the bill for residents in a typical Band C property soar from £1,752 – or £146 per month – to £2,015 – up more than £30 per month to £168.
The Department for Levelling Up, Housing and Communities today issued its financial settlement for hard-pressed local authorities across England, with a 9.4per cent increase in funding overall. This represents an extra £5.1billion compared to last year’s national settlement.
The settlement includes £2billion in additional grant funding for adult and children’s social care for 2023-2024 and what the DLUHC describes as “a one-off Funding Guarantee that ensures every local authority in England will see at least a 3per cent increase in core spending power before any local decisions around Council Tax are taken”.
In making the announcement, Levelling Up Secretary Michael Gove described it as “a fair deal for local government that reflects the vital work councils do to provide key services on which we all rely”.
The residents of Croydon, especially those who voted Conservative in the local elections last May, may beg to differ, as once again they find themselves footing the bill for the poor management of the borough.
Perry had wanted to increase council rents by 11per cent this year, but he was restricted to a 7per cent increase by DLUHC.
Perry’s Section 114 notice was Croydon’s third in two years, following the Town Hall’s 2020 financial crash brought about by the free-spending and incompetent Labour administration. Perry’s S114 was the first, ever, to be issued pre-emptively, predicting that he would not be able to deliver a balanced budget in a future year.
In his election campaign, Perry had promised to fix the problems that had caused the crash – the £30million extra spent on children’s services after it failed an Ofsted inspection; the £67million frittered on the Fairfield Halls; the £200million loaned to Brick by Brick.
But he claims all his efforts are hamstrung because of the increasingly high levels of debt repayments, and interest, that Croydon is having to pay on its £1.6billion borrowing. That includes £120million in a capitalisation arrangement – a bail-out – from the government agreed in 2021. And it includes £1billion-worth of debt built up by the previous Conservative administration, in office to 2014, in which Perry was a senior member of the cabinet.
Since issuing the latest S114 notice in November, the council’s finance director, Jane West, and the chair of the government-appointed improvement panel, Tony McArdle, have both said that further multi-million-pound bail-out loans – and therefore even more debt – would not even begin to address Croydon’s deeply entrenched financial problems.
It was suggested that allowing the council to default on some of its loans – becoming the local government version of Enron – would resolve many of the issues, but there has been no mention of that from the DLUHC in today’s announcement from Marsham Street, nor from Croydon Town Hall. None of McArdle’s improvement board quarterly reports have been made public since December 2021.
Read more: Council forced to issue 3rd bankruptcy notice in just two years
Read more: Croydon needs deal that could set precedent for all councils
Read more: After nearly a year, Gove is sitting on two ‘improvement’ reports
Read more: Funding outlook for all London’s boroughs is ‘beyond bleak’
Read more: ‘We’re not teetering on the brink of bankruptcy’ claims Kerswell
- Inside Croydon – as seen on TV! – has been delivering local community news since 2010. 3million page views per year in 2020, 2021 and 2022.
- If you want real journalism, actually based in the borough, you should consider paying for it. Please sign up today. Click here for more details
- If you have a news story about life in or around Croydon, or want to publicise your residents’ association or business, or if you have a local event to promote, please email us with full details at email@example.com
- Our comments section on every report provides all readers with an immediate “right of reply” on all our content. Our comments policy can be read by clicking here
- Inside Croydon is a member of the Independent Community News Network
- Inside Croydon works together with the Bureau of Investigative Journalism, as well as BBC London News and ITV London
- ROTTEN BOROUGH AWARDS: Croydon was named among the country’s rottenest boroughs for a SIXTH successive year in 2022 in the annual round-up of civic cock-ups in Private Eye magazine
For higher bills and fewer, poorer public services, vote Conservative
How can the Government justify holding key sector workers’ pay increases down to 4 or 5% while sanctioning a Council Tax rise in Croydon of 15%, and with general inflation running at more than 10%?
And how can either of the major parties on the Council support this swingeing Council Tax rise when there has been no accountability to date for the mismanagement by both of them of the borough’s finances?
I sense a “Can’t pay, Won’t pay” campaign coming on.
Why is this articled framed “as the fault of Jason Perry”? Jason has inherited a dire financial mess from the previous (possibly criminally incompetent/negligent) administration.
Whoever is in charge of Croydon is going to be very challenged to sort this mess out – at least Jason is at the table and running the borough.
Perry has done nothing.
He’s broken his promise on Purley Pool.
He’s broken his promise on the Penn Report (worse: he has failed to act on its recommendations, to refer some of those responsible to their professional bodies).
He’s scrubbed out a bit of graffiti, but the money for that was in the balanced budget he inherited.
And he lied to full council about there being a stair-less Brick by Brick house and, when caught out, passed the buck by saying he was “misinformed”.
Remember, Perry voted for the Labour budgets that bankrupted the borough – not once, but twice.
Meanwhile, he’s still holding a directorship of his family business, while pocketing £81,000 per year in full-time council allowances.
One of the few things Perry has done was to run up the white flag within six months of the election and claim he wouldn’t be able to balance the budget for next year. It was that action by which he has boxed himself into a corner and now *must* increase Council Tax by 15% – three times more than any administration since 2010.
He probably never even expected to get elected (look at the national polls in early 2022). He’s found sitting in the hot seat a bit too hot.
Perry’s is not, and never was, up to the job.
We warned that this Mayor business would be #ABitLessShit.
With Perry, its #ABitMoreShit.
Part of the mess was a lack of funding and no one being brave enough to actually own up to it. So an increase in funding was always needed.
As is so patently clear and has been for so long the level of borrowing was wrong and unsustainable to the point of fraudulent.
But taxpayers are not culpable as the debt was run up outside of due process by both Tory and Labour administrations under the strong leader role.
The DLUHC was instrumental in allowing that level of borrowing – it was also responsilbe for the regulatory process to be put in place to ensure this did not happen. If failed.
It is now instrumental in denying residents of Croydon a referendum on that inflation busting increase. An Inflation busting increase denied to most other people emloyed and self employed An inflation busting increase not allowed for Nurses, Ambulance paramedics, train staff, etc. you know – all those key workers this shabby cabinet clapped for and lauded as pillars of the community – what hypocrisy – what deceit what dissembling. An inflation busting increase that still will not improve or even stop the decent into chaos of this Borough.
There is a debt to be paid by this Government in Croydon. It should pay it for it’s own failures and humbly apologise for causing it/allowing it to happen in the first place!
We are soon not to beallowed to protest under this Government. I do believe we should not protest.
Perhaps a serious misqutation of Dylon Thomas would not go amiss.
We should not go gentle into that good rise of tax – we should cheer, jeer, and clap – very slowly with rasberries abounding and pucker up whilst expelling vociferously but silently the foul stench emanating from the death of our good democracy!
This is appalling.
Surely we can only be expected to pay for the services we receive, which is next to nothing.
The failures are those of politicians and public servants, they should have been some oversight and subject to punishment for failures, this obviously has not happened.
In fact those responsible seem even to have enjoyed impunity.
The citizens of Croydon were not responsible for permitting irresponsible borrowing by the council, much of it coming from Government sources. If it were a bank those sources would lose their money on bankruptcy.
Perhaps I am naive, but surely there should be some recourse for citizens, and those in positions of responsibility should be held reponsible for their actions. Pity not enough people would be willing to stage a Council Tax strike!
This is absolutely outrageous. Residents should be protesting this with all they can.
Why on earth should we be forking out for the lack of funding by central government and the scandal of Croydon Labour wasting millions?
All that will happen is we will be in the same position in 12 months time. Embarrassment.
Conservative Ministers dodge paying tax
Conservative Councils tell us to pay 15% more
One rule for them……..
Are there any plans to organise and protest against this?
This disaster has been years in the making, it is difficult to see what any administration of any political shade can do about it. It would be a start to stop it happening again by somehow making councillors and officers personally liable for their actions. It can’t be right that they can just shrug their shoulders and carry on making the same mistakes. Perhaps they should be disqualified from holding public office again?
Looks like Part times attempt to get Croydon’s debt written off has failed. So he intends to write off local council tax payers incomes instead. They can argue about who to blame for the dire straits the Council is in till the cows comes home, but such a huge hike in taxation at the behest of Gove in Central Government who has not provided any material support shows how toothless Part-time is with influence and the desperate state the country (let alone Croydon) after thirteen years of misrule.
At what level can the increase even be justified ,given the failings by Croydon council ? How much of the increase will be attributed to Council staff salaries and pensions etc? Surely there can be cut backs on the councillors and some of the staff /departments referred to in the reports , some of whom have been there for many years. What steps have been taken by the Mayor to chase the money given the record debt of 1.6 Billion pounds. Recovery of the money would no doubt help alleviate some of the debt.
I believe this inflation busting rise is the fault of central (conservative) government.
How did they let this financial mess continue for so many years?
They encouraged it with housing targets etc and did not adequately audit or oversee the performance of the local council.
They are now happy to sanction tax rises locally so central government isn’t responsible for the historic underfunding.
I will go to prison then pay this enormous increase I am 73 years old and I will also get fed which at the moment is another plus