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Dear Rachel: Croydon’s a microcosm for much of what is wrong

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Ahead of next Wednesday’s Budget, the first Labour Budget in 14 years, columnist ANDREW FISHER, right, has penned this open letter to Chancellor Rachel Reeves

Dear Rachel,

Record NHS waiting lists, a housing crisis, growing levels of child poverty, backlogs in the courts and asylum systems. Most of our dedicated public servants – whether in councils, schools, hospitals or even in Government departments – are taking home less in real terms than they were in 2010.

Exchequer mate: Chancellor Rachel Reeves has a daunting task in the Budget

The Tories have undoubtedly left the country in mess, public services in crisis and people suffering as a result of those depleted services, lost income and rising living costs.

You have your work cut out next week, but that’s why you wanted to be Chancellor – to put things right, or “fix the foundations and deliver change”, as you have put it.

I’m sorry to be parochial, but I want to start with Croydon. As well as being my home, it’s a microcosm for much of what is wrong in the country.

We have a Conservative Mayor who was elected promising to “fix the finances”, we have a council chief executive on a £192,000 salary, and despite the presence of an Improvement and Assurance Panel imposed almost four years ago by Michael Gove that oversees both, the council remains a basket case.

Hard times: Birmingham City Council, the largest in Europe, is one of 19 English councils that needed Exceptional Financial Support from government this year just to balance their books.

Of course, the competence of all of the above can and should be scrutinised, but the painful reality is that none of them are capable of alchemy (the medieval belief that base metal could be turned to gold).

Croydon Council is predicting it will be £42million in deficit this financial year because it does not have the money to meet the growing needs of its people.

Croydon has hiked its Council Tax by 21% in the last two years, closed four libraries, sacked more staff and cut its social care budget – and still the greatest minds, and Mayor Perry, can’t “fix the finances”.

They are not fixable – they are unsustainable and have been for many years.

Our beleaguered council is far from alone: a record number of councils received “Exceptional Finance Support” from the Government this year to be able to balance the books. Councils from Cumberland to Eastbourne and from Plymouth to Middlesbrough needed emergency permission to flog off their assets to keep even basic services partly functional. That is not sustainable.

According to a survey by the Local Government Association, 1-in-4 councils in England warn they will also need to rely on EFS in the next two years. Separately, a report from the County Councils Network has warned that 26 county councils are at risk of bankruptcy by 2027 due to the cost of Special Educational Needs and Disability services alone.

The crisis in local government finances is having an impact on every service that councils provide, or at least should.

In Croydon, a survey by the National Education Union found 75% of teachers felt that SEND provision for pupils in their school had been reduced significantly over the last two years.

That is again is replicated nationally, with the National Audit Office concluding that “England’s special educational needs system is not delivering for children and young people.” The system, the NAO says, “is financially unsustainable.”

Unsustainable: an increase in homelessness is putting local authorities under even more pressure

Like the rest of the country, Croydon has seen a rise in rough sleeping in recent years, and due to austerity cuts, the council has cut funding to charities that were helping homeless people.

The council has been taken to court after trying to shirk its responsibilities to those in housing need – and current figures indicate that more than 80% of placements are into expensive, unsuitable B&B accommodation. In many cases, families are being split up.

We need massive investment in housing – especially in new council housing – to meet social need.

It’s welcome that you will be revising the fiscal rules that for too long have left Britain investing less than comparable nations, but a large chunk of that additional funding needs channelling into vital social infrastructure, like council housing.

As a borough, Croydon is home to around 55,000 pensioners. On Government figures, more than 85% of them can expect to lose their Winter Fuel Payment this year, despite energy companies hiking bills by 10% this month. As you will see from the polling, this has done the Labour Government immense damage. Pensioners on £11,500 are not “those with the broadest shoulders”.

Underfunded: MP Steve Reed’s constituency straddles neighbouring boroughs Lambeth and Croydon

Next week’s Budget is an opportunity to admit you got it wrong and rethink this policy change.

Finally, and this is parochial – but important. Croydon is monumentally underfunded even relative to the overall situation that afflicts all councils. In 2023, neighbouring Lambeth received £481.73 per resident, compared with £239.25 for each Croydon resident. That is not fair funding.

I would hope that your Cabinet colleague Steve Reed, whose constituency straddles the two boroughs, has already raised this with you and with Local Government Secretary Angela Rayner. But just in case it has slipped his mind, we need an urgent review of both the overall level and the distribution of council funding.

Good luck with the Budget next week – Labour’s first in 14 years and the first ever delivered by a woman Chancellor. There’s a lot to put right to “fix the foundations and deliver change”. Croydon will be watching.

Your sincerely,
Andrew

Andrew Fisher’s recent columns and interviews:

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