CROYDON IN CRISIS: Typical households’ bills will have risen by £388 in less than two years under the Tory Mayor, who has still failed to get a Government deal to write off some of the borough’s debts
The borough’s Council Tax bills will have soared by an inflation-busting 20.7% in less than two years since Tory Jason Perry took over as elected Mayor, it was confirmed in an announcement from Fisher’s Folly this morning.
This, according to details released for the cash-strapped council’s 2024-2025 budget, is what passes for “strong progress” and “fixing the finances”, as the Conservative Mayor also prepares to make another £31million-worth of service cuts in the next financial year.
Mayor Perry was allowed by the Tory Government to hit Croydon residents with a 15% Council Tax hike in April this year. Next year, he’s proposing another 4.99% Council Tax increase on top of that.
A 2.99% Council Tax increase is proposed, together with the 2% adult social care precept that all councils are expected charge. “Despite the council’s challenges, Mayor Perry has been clear that he will not support an increase above the referendum cap next year or in future years,” the council said this morning. As if the residents who were hit by Perry’s 15% tax hike should somehow be grateful that he intends to compound that next spring.
It all means that a typical Band D household will have seen its annual Council Tax bill go up by £388.44 since Perry was elected Mayor in May 2022 – from £1,507.07 to £1,895.51.
Other households in different bands will have experienced a similar rate of increase in their Council Tax bills.
It leaves Croydon residents paying the second-highest Council Tax bills in the whole of London, while receiving ever-diminishing services from their local authority.
Perry was elected on a promise to “fix the finances”, but has so far failed to deliver any real, transformational deal with the Government to eliminate the toxic debt built up by Labour and the previous Tory administration, of which he was a leading member.
In the budget proposals released today, the need for a £540million debt write-off by Government is mentioned again. Failure by Mayor Perry to seal that deal led to him issuing a Section 114 notice in November last year – predicting that he would be unable to balance the budget in 2023-2024.
“Next year, Croydon will spend £64million of its budget on servicing debt,” the council said this morning.
Perry’s solution has been more massive cuts, massive Council Tax hikes, and flogging off anything that’s not nailed down, usually at a massive loss. And borrowing yet more money from Government to cover the black hole in the budget – another £38million debt to be incurred in 2024-2025. That won’t be the end of the emergency borrowing, either. “The council has requested continued government support over the next four years,” they said this morning (our italics).
And yet, in the next-but-one sentence, they add: “The council has been clear that more borrowing is not a solution.”
The self-congratulatory tone of today’s council announcement (headed: “Croydon continues to make strong progress in fixing its finances with 2024-2025 budget proposals”) is little different from the delusional attitude shown in the days when the council was being run by Negrini, Newman & Co.
The council statements appear to have been drafted in Pyongyang: “The government has noted Croydon’s strong progress in tackling its financial challenges under Mayor Perry’s leadership.”
The reality is that under Perry and chief exec Katherine Kerswell, the Government was sufficiently concerned that in July, Michael Gove, the Secretary of State at the Department for Levelling Down [sic], issued directions that put Croydon’s improvement and assurance panel on a statutory footing because the council was unable to meet its “Best Value Duty”. This was unmentioned in the council’s lengthy budget announcement today.
The Government-appointed improvement panel has issued its “exit strategy” today, but they look like they – and not Perry or Kerswell – will effectively be in charge of running Croydon Council until mid-2025.
The budget papers have been released ahead of upcoming scrutiny committee and cabinet meetings, before a lip-service public consultation process through November. Given the abject lack of opposition at the Town Hall – Labour councillors merely abstained over the 15% Council Tax hike back in March – it seems unlikely that much, if anything detailed in the “Medium Term Financial Strategy” (they have a strategy! Who knew??!) will undergo significant change.
Perry said today: “Government support is critical to balance our budget next year and more borrowing is a short-term fix, not a solution. I will be continuing to make the case for our borough and working with the government to secure the right support package for Croydon.”
But Gove, in the dying days of his Conservative Government, is unlikely to pony up half-a-billion for Croydon and create a precedent for all of the local authorities that have been bankrupted by 13 years of Tory austerity.
As piss-poor Perry said when he first took office, “Things are going to get worse.”
It remains the only promise Perry hasn’t broken.
Read more: ‘There is no solution in sight’ warns council’s finance chief
Read more: Town Hall staff braced for £31m more cuts and job losses
Read more: ‘Uncertainty faced by all local authorities is unprecedented’
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