Perry enters new plea to government to write-off council debts

CROYDON IN CRISIS: ‘This is not something we will be able to fix alone,’ the borough’s Mayor conceded in a recent letter to the Tory government – who haven’t bothered replying to his request.
By our Town Hall correspondent, KEN LEE

No one’s listening: Mayor Jason Perry can’t get an answer to his pleadings

Jason Perry, Croydon’s £82,000 per year elected Mayor, has the catchphrase, “LIstening to Croydon”.

Trouble is, as Perry was forced to admit in public this week, no one in government is listening to him.

Perry has asked the government again for more financial help to write-off a chunk of the borough’s “unsustainable” and “toxic” £1.6billion debt.

Half of that borrowing was built up the last time Perry and the Tories had control of Croydon Town Hall, before Labour’s Tony Newman and his numpties managed to double the debt between 2014 and 2020.

It means that around one-quarter of Croydon Council’s annual budget, close to £50million, is now being spent just to pay off debt repayments and interest, instead of being used to provide the essential services residents expect.

Most of the borrowing came from central government, and the Public Works Loans Board.

But no local authority has ever before been allowed to default on its debt.

That might all be about to change.

Join the club: Woking issued a S114 notice this week, after 22 years of Tory mismanagement

Croydon is now at the front of a rapidly lengthening queue of heavily indebted boroughs.

These include Thurrock (Tory-controlled; £1.5billion) and Slough (Labour; £1billion), and were joined earlier this week by Woking in Surrey which, after 22 years under Conservative control to 2022, has amassed £2billion of debt and has now joined that once exclusive Section 114 club.

Only Croydon, though, under Piss-poor Perry, has agreed to hike its Council Tax by 15per cent.

Perry became Croydon’s first-ever elected Mayor in May 2022 after a campaign in which he promised to “fix the finances”. Under negotiations with Whitehall officials that have been proceeding for most of the past 12 months, Croydon has been handed another £224million in government loans (Part-time Perry has failed to mention whether his loans are “toxic” or not).

But Perry says he’s had no word from his Conservative Party colleagues in government whether they will deliver the £540million debt write-off the Croydon Mayor says is necessary.

At this week’s council scrutiny meeting, Labour councillor Rowenna Davis, the committee chair, reminded the Mayor that, as a consequence of government intervention announced in March, he is now Powerless Perry.

“The mayor is still in charge of the council, but if the council is found to be breaching its best value duty for the public the panel has the power to step in and change any decision they are concerned about,” Davis, who has worked as a teacher, schooled the Mayor.

It means that the improvement panel, appointed by the government in the immediate aftermath of the council first going bust in November 2020, can now step in and veto any decisions that Mayor Perry and his Conservative council cabinet might agree.

Perry at least knows that Tony McArdle, the chair of the improvement panel, agrees with him and the council’s director of finance, Jane West, that the “nuclear option” of debt write-off is now the only way out of the very deep hole that Croydon is in.

Non-committal: Lee Rowley hasn’t responded to Perry’s request

“We have made it very clear to government that there needs to be a resolution this year before we end up going into another budget cycle,” Perry said, adding the weasel word at the end of his sentence, “ideally”. The government has left Perry waiting on an answer since he issued a S114 notice of his own last November.

Pitching for this week’s No Shit Sherlock Award, Perry added, “I think we have to remember that this hasn’t been asked of government before.”

Perry said that he is in some kind of “ongoing regular conversation with government”, although he admits to being none the wiser about whether a deal will be agreed. “I can’t give you a firm guideline on timings,” he said.

This week’s announcement from Woking probably won’t have accelerated the process for Croydon: Michael Gove and his local government minister at the Department of Levelling Up, Lee Rowley, could calculate now that they might leave a festering turd on their desks, ready to be picked up by whoever is unfortunate enough to succeed them in Sir Keith’s Blue Labour government after the General Election…

It certainly appears that Rowley is now cocking a deaf ‘un to all his Tory mate’s pleadings.

Perry wrote to Rowley on April 26. This week, the emasculated Mayor was forced to admit to the councillors on the scrutiny committee that, six weeks later, Rowley had failed to respond to his (modest) request for a meeting once every six months.

In the letter to Rowley, Perry said that to return Croydon to “a sustainable financial footing” cannot be achieved “without long-term support from government to reduce our toxic debt burden”.

Perry wrote, “Whilst I am committed to taking the tough decisions necessary to reduce costs and improve efficiency in the council…”, meaning ever more Tory cuts, “…this alone cannot meet the scale of challenge presented by our historic debt level.”

And then, Perry admitted, “This is not something we will be able to fix alone.”

Read more: From part-time to powerless: Perry’s first year under scrutiny
Read more: Perry admits he can’t take action against council’s bankrupters
Read more: Councillors agree to chase Negrini for golden handshake cash
Read more: Cover-ups and denial over Brick by Brick failure

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  • 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

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11 Responses to Perry enters new plea to government to write-off council debts

  1. Suzie says:

    If Perry had listened to what Croydon people were saying he would have realised Government was not going to listen to him. He then might have realised the utter stupidity of asking government for permission to put our council tax up by 15%.

    If Perry misreads the room to this extent, how can he expect us to respect him as a politician?

    He has squandered our money for his own ambition.


  2. Andrew Pelling says:

    At the Purley Mayoral Question Time the Mayor speculated that a rescheduling of the interest payments rather than debt forgiveness was something that might happen. He hoped this would happen by the Autumn.

    So we would have lower interest rates now adding further debt through unpaid interest.

    This would have the effect of putting off the issue of debt forgiveness for Croydon kicking the can down the road and allowing the council to have a higher prospect of being able to fund some services over the next few years.

  3. Peter Underwood says:

    The Conservative Government has been underfunding Councils for thirteen years. It now looks like they are going to try to put off doing anything about it until the next General Election. Whether they try to bribe voters with a spending splurge before the election, or just leave the mess for whoever takes over after the election, remains to be seen. Either way it’s people living in boroughs like Croydon who will be left to suffer just to suit the Conservatives’ political plans.

    Labour will point out that the Conservatives are failing to sort out the finances – and they are right. The Conservatives will point out that Labour financial incompetence helped get us in the mess we are in – and they are right about about that. Because when it comes to what’s best for Croydon, both of them are the wrong choice.

    Croydon has suffered for too long under both Labour and Conservatives. It’s time we had a fresh Green start.

  4. Ian Kierans says:

    Ok lets look at this a different way for a change.

    Perry clearly does not have a clue and is totally devoid of creativity and innovation let alone anything else. But like the proverbial clock he has two rights.
    1. Croydon Council are over £1.6bn in debt from successive mismanagement from Fisher to – well himself – via Newman.
    2. £49m+ on interest.

    So what has he done?
    Like a crap poker player he showed his hand was a busted flush.
    Like a disaterous negotiator he gave and forgot to get any reciprocation.
    Like a complete numpty he evenalienated his own voters who will bear the worst of that rise of 15%
    He has clearly no insight into the fact of precedent. No understanding of debt management and not a lot of anything else obviously.

    So all the above is the norn. Now for something completely different.
    Lets look at the debt.
    1. A simple and probably workable solution to the interest of £50m would be too ask your lender for an interest holiday. So a saving of £50m if granted.
    So say £20m still goes to capital payback £30m back for services and reserves.
    Has he asked this?
    To enable the exception for Croydon to be made a full independent enquiry into how the debt was incurred and by whom and why. Alternatively the Governemtn could just accept the exception as a given. Some could visualise that as a threat biut it is not. Just a saving of public finance from looking at a circumstance that requires no further self evidentory reiteration. Unless of course it would prefer a public outing of all the data toshow exactly why some debts of Councils should be an exception?

    Capital debt of £1.6bn
    Ask the loanee’s for details of the due diligence it took prior to lending those sums and the debtors ability to repay.
    Explain that the debt is unsustainable and whereas the debtor has tried to repay it is effectively bankrupt. Three s114s are there to show this.
    However also state that to continue on this course would be unsustainable and as was stated the council is found to be breaching its best value duty on a daily basis.

    Therefore if this continues into July the Mayor will have to resign and hold a new election – of course Mr Perry should stand for re-election and being honest here we should all support him if he took that stance (or anyone that does). I would suggest that all elected Councillors also hold extra-ordinary weekly meetings and review all areas of Manadatory duty and spending and put the lot on hold clearly stating that there is no possible way to manage borough finances and if no answer also resign posts en masse.

    I tis clear that the Creditor has the power to manage the situation but will not and requires a patsy, so the patsy needs to remove itself as the last resort and let the Government deal with the situation and take the kudo’s or not at the Elections.

    A bit of a nuclear solution perhaps but clearly this Governemnt does not want a major open and televised investigation into the shit shambles of public finances. so perhaps they can get their shit together and bring workable solutions to the table?
    Otherwise let Mr Starmer face that can of worms and see if he can find a solution as it is clear that Perry, Rowley, Gove and Sunak are unwilling to do this.

    . Whilst this Mayor, Rowley, Gove and Sunak are playing pass the parcel we have no investment, shit services, rampant crime deaths and drugs and a very disillusioned electorate.

    This Borough needs investment to rebuild and grow. It also needs crativity nd innovativeness to develop new and sustainable public services that business trusts and wants to be part of a growing town. We are a very diverse community that can work together respecting others backgrounds and what they bring to the town.

    About time our administrators and politicians harnessed that and made decisions of worth to enable not disable.

  5. D McNair says:

    If he is ‘Piss Poor Perry’ and “Powerless Perry’ why exactly are we paying him £82,000 for his part time piss poor performance?

  6. derekthrower says:

    He has failed. He stated there should be no reward for failure. Therefore this hopeless tub of lard should be unpaid as he occupies the space in the Council Offices or more preferably end this fiasco and just walk and go back to his full time job.

  7. If he waits a bit, Perry can ask the new Prime Minister for a deal. The wheels are falling off the Cabinet of the current one

  8. Bertie Basset says:

    We need to stop thinking that Croydon is a special case. It isn’t. Government won’t and can’t forgive any of the debt because of the queue that will instantly form of the other 150 odd LAs seeking the same thing.

    Croydon is one of many LAs financially mismanaged for several years by both main parties. Yes the change in government funding made things harder but the lack of honesty from the Borough’s politicians about what is and is not possible within the budget has been nothing short of criminal.

    Hard times are ahead and the people of Croydon will suffer and ultimately be worse off as a result.

    • All valid points, “Bertie”.
      But if you can’t bring yourself to commit a bit of honesty yourself and use your real name, then we won’t publish your comments in future

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