Tandridge, one of Croydon’s boundary neighbours to the south, has become the latest Surrey council to appeal to central government for a financial bail-out.
Tandridge is just the latest of a queue of local councils which have simply run out of money because of increasing demands on their services, rampant inflation and the failure of the Tory government’s annual settlement to properly reflect the authorities’ needs.
At the front of that queue to minister Michael Gove’s Department for Levelling Up office in Marsham Street with its Town Hall begging bowl is Croydon, which after a £120million bail-out in 2021 is now seeking to have £540million of its debts – mostly loans from the government – written off.
When Croydon first declared itself effectively bankrupt, in November 2020, it was only the second council this century to issue a Section 114 notice. But following the excessive financial pressures caused by covid, since then Thurrock, Northumberland and Slough have followed suit, Nottingham and Liverpool city councils have been placed under special measures, while Eastleigh and Medway are among other authorities close to financial collapse.
Last week, Woking in Surrey joined that list.
Woking has amassed debts of £2billion (Croydon’s General Fund debt is £1.3billion). There, the council has proposed a 2.99per cent Council Tax increase (Croydon’s Mayor Jason Perry has requested a 15per cent Council Tax hike).
Woking Borough Council deputy leader Will Forster told a council meeting last week: “We need help.”
According to Woking budget papers, the council borrowed about £1.8billion for investment purposes (or “playing monopoly with public money”, as Mayor Perry and Croydon Tories would describe it), but these investments are only bringing in £38.5million in annual revenues. Woking’s annual interest payments are predicted at £62million.
Woking’s financial management is under investigation by the Department for Levelling up Housing and Communities.
Woebegone Woking: another Surrey council is on its uppers
“Woking needs government support,” Forster told the BBC. “The council can’t afford to pay off its debt, not even service the debt.
“The papers are quite stark – £60million a year just to service the debt, repaying the debt is even more.”
As is the case with Croydon, much of Woking’s borrowing has been from the government, and was sanctioned by the government. Its budget has gone into a state of shock since the steady rise in interest rates over the past 12 months or so.
“At this point I cannot see how it can make a sustainable budget, which is terrifying,” Forster said.
Tandridge District Council’s request to government is unusual, since they have asked Whitehall for help to restore their reserves. A previous, similar request, made in August 2022, was rejected by local government minister Paul Scully.
Reserved: Tandridge council leader Catherine Sayer
The majority group on Tandridge council is made up of independents and the Oxted and Limpsfield Residents Group Alliance.
Council leader Catherine Sayer has written to local government minister Lee Rowley of a “potentially ruinous depletion of reserves which took place prior to the recent transformation of the council’s finances”.
According to a report in The Municipal Journal, in February 2020 it was discovered that “selected cost lines appeared to have been removed from Tandridge’s pensions-related budgets to the value of £920,500”.
In her letter to the minister, Sayer wrote: “You will appreciate that with material uncertainty regarding funding levels for 2023-2024, and the severe effect of inflation on the cost of delivering local authority services, the council’s financial position is far from secure.”
The MJ reports that Tandridge is forecast to overspend its 2022-2023 budget by 4per cent, or £447,000.
Read more: Perry to preside over record-breaking 15% Council Tax hike
Read more: Public’s furious reaction to Perry’s Premium Council Tax hike
Read more: Mayor Perry: ‘It’s going to get worse before it gets better’
- 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 inside.croydon@btinternet.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 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
