When a neighbouring London borough, with a smaller population and less deprivation than Croydon, gets £60m more central government funding than Croydon, something is very wrong. ANDREW FISHER on what the borough’s Mayor should really be doing instead of heaping a 15% Council Tax hike on long-suffering residents
Missing a trick: Jason Perry has failed to deliver fair funding for Croydon
Whether it’s the banking crash, the energy crisis or, more parochially, Croydon Council’s financial collapse, the same story always plays out: it’s ordinary people who are left carrying the can when those in power make a mess of things.
Today in Croydon, residents experiencing the worst fall in their living standards on record face being hit with an eye-watering 15per cent increase in Council Tax from April.
I’ve previously written about why Croydon finds itself in the state we’re in – a combination of successive incompetent administrations that peddled pipedreams and piled up debt, plus huge cuts in funding from central government and the long-term structural underfunding of the borough.
Our directly elected Mayor, Jason Perry, came to power nine months ago promising to “fix the finances” of Croydon Council. He only won May’s mayoral election narrowly – does anyone seriously believe he would have done so if he had said then that he would hike Council Tax by 15per cent?
Normally, when councils want to put up Council Tax above a threshold of 5per cent, they have to get backing from the residents through a referendum. But, as Mayor Perry told council staff in a briefing webinar yesterday afternoon, he made the request to Government directly, asking them to waive the referendum and for him to be allowed to impose a 15per cent tax increase on the people of Croydon.
Mayor Perry is yet to honour his pledge to re-open Purley swimming pool, he is now closing Cherry Orchard Garden Centre, he has decided to completely defund the local voluntary sector and he is making £36million of service cuts this year alone. It’s not a great prospectus to go to the people with, so you can see why both Mayor Perry and Secretary of State Michael Gove knew a referendum would return a resounding “No!” from residents – who are signing up to oppose that policy in their thousands.
Cheap trick: by allowing Croydon a 15% Council Tax hike, Tory minister Michael Gove doesn’t have to fund the council fairly
The Mayor’s case is that an extra £20million of cuts (on top of the £36million he’s already proposed) would be required if not for the 15per cent hike in Council Tax. This, he told yesterday’s staff briefing, would leave services “unsafe”.
The problem with that argument is that the council’s budget proposes a further £27.3million of cuts for 2024-2025, and then a further £20.7million for 2025-2026.
So sooner or later, we will end up with “unsafe” services anyway. The situation is not sustainable.
The 15per cent Council Tax hike is monumentally unjust, especially when more people than ever are struggling to make ends meet. Croydon residents clearly feel that because they are signing petitions in their tens of thousands against this unfair rise – more than 22,000 have now signed to say no to the 15per cent and to fund Croydon fairly.
More people have signed that petition in little more than a week than the total number of residents who signed the petition calling for a referendum over whether we should have an elected Mayor – which ultimately landed Perry in the hot seat.
So if the Council Tax increase proposed is unfair, what should Mayor Perry do instead?
His first move should have been to invite all Croydon’s MPs and councillors (Conservative, Labour, Greens and Liberal Democrat) together and built a unified campaign for fair funding for Croydon. It’s still not too late to do that.
We are a borough with large and growing social needs, and a population that has increased more rapidly in the last 10 years than the London average.
Croydon will this year receive £93.5million in its “Settlement Funding Assessment” from central government. That is an increase on last year’s £88.7million. But Croydon received more in 2018 (£94.5million) and much more in 2016 (£114.6million).
Overall, council funding has been falling for more than 10 years. While the cuts to Croydon’s funding from central government is worse than some councils, it is far from unique.
But Croydon has been suffering structural underfunding for more than a decade, and this is the point that should be made by Mayor Perry and anyone who truly has Croydon’s interests at heart.
Wet dream: Mayor Perry’s election promise to re-open Purley Pool has been quickly dropped
Neighbouring Lambeth – with a smaller population than Croydon – is receiving £153million in central government funding. That works out at £481.73 per Lambeth resident, compared with £239.25 for each Croydon resident. That is not fair funding.
If Croydon was to get the same funding per resident as Lambeth, the borough would have an extra £95million to spend every year – more than enough to avoid the need for a 15per cent Council Tax hike.
Does some other factor justify Lambeth’s extra cash from government?
It’s not obvious: the Census 2021 data on social deprivation shows 48per cent of Croydon households are “not deprived” in any dimension. In Lambeth, 50per cent of households are deprivation-free.
The demand that Mayor Perry should be getting every Croydon councillor and MP signed up to is Fund Croydon Fairly. A true leader for Croydon – what the Mayor is supposed to be – would be making that case.
To his credit, Perry recognises that the succession of “capitalisation directives”, what most people understand as loans from the government, are unsustainable. Croydon already has unsustainable levels of debt.
In the money: Lambeth has a smaller population and less deprivation than Croydon, but is getting £60m more funding this year
He knows that Council Tax cannot be raised by 15per cent again next year.
He knows that more cuts will make vital local services – like social care and child protection – unsafe.
The only serious option is to increase Croydon’s funding, for which there is a strong and demonstrable case based on justice, fairness and reason: Fund Croydon Fairly.
A real leader would unite people around that case: Croydon’s politicians have a choice – unite in the borough’s interests, or continue the partisan blame game. Which will it be?
If they continue to think hard-pressed Croydon residents should pay more to get less, then I’ll see you at the protest outside the council budget meeting on March 1.
- Click here to sign the the petition to Parliament
- Click here to sign up to our separate petition to Croydon Council calling for fair funding
From 2015 to 2019, Andrew Fisher, pictured right, worked as the Labour Party’s Director of Policy under Jeremy Corbyn. He is the chair of the Croydon Central Constituency Labour Party. Fisher is also the author of The Failed Experiment – and how to build an economy that works, and now writes regular columns for InsideCroydon in a personal capacity
Some of Andrew Fisher’s recent columns:
- Croydon is in a right Pickles and it is easy to work out why
- Fair day’s pay for a fair day’s work is not too much to ask
- Croydon surgeries where half GP consultations are by phone
- Inside Croydon – as seen on TV! – has been delivering local community news since 2010. 3million page views per year in 2020, 2021 and 2022.
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Agreed, the “solution” to Croydon’s short term problem would be to get the government to pay the more under its settlement funding assessment model. The author suggests the sole criteria for funding is deprivation percentages in each council around the country. I suspect that this is not the case. If it is then some faulty information was fed into the model…
If the government were to change the parameters of the model to give Croydon more money than it currently gives, how many councils around the country would end up with more money and how much would it cost the government? There are well laid out criteria that delivers more money to Lambeth than Croydon and it would be interesting to know, specifically, what they are rather than imply there is conservative government bias toward the Labour dominated Lambeth council!
I am not sure that cross-party support would do more to persuade the government to give more money would work any better than a conversative mayor asking the same question. Getting support from the disastrous Labour politicians that got us into the mess in the first place would be counter-productive in my view.
Of course, Mayor Perry is trying his best to get the government to do more to help, especially with regards to the massive debt overhang and I am sure that if he had any choice in the matter he would not have gone for this 15% rise. He knows this is negatively impacting his popularity and may allow Labour to regain control in the next election. The fact that he is doing this suggests he had no choice in the matter and it is more that wishful thinking to suggest the “solution” is a bigger government handout alone.
Perry won’t go for fairer funding, as being a Tory, it would mean admitting the Councl Tax regime that Thatcher was forced to bring in 30 years ago after her Poll Tax disaster, just isn’t working. He’d rather fleece us and scapegoat Newman’s Labour loonies, who are mostly but not solely to blame for what’s happened to Croydon.
It’s possible that Perry asked for a better deal from Gove but got rebuffed. We’ll never know.
What’s sure is that this Tory government won’t bring in fairer funding, because they prefer to let rich tax dodgers have an easy ride, give billion pound backhanders to their mates with our money and allow energy companies to make massive profits without windfall taxes..
Helping Croydon out of a hole isn’t going to happen, as Sunak, Hunt, Gove and co just don’t care. And don’t get your hopes up about the return of the lying, corrupt narcissistic treacherous clown who calls himself Boris. He’d be no better.
We’ve all been stitched up like the proverbial kipper
Good article but unfortunately Justice, Fairness and Reason are not in the vocabulary of either the national nor the local administrations, though I’m certainly not saying we shouldn’t try to educate them.
Can the mighty financial intellect, Jason Cummings, answer the glaring question.
Or does the colour of his bullshit only come in one shade?
One of the contributory factors of the current financial crisis is the massive cut in funding from central government