By KEN LEE, our Town Hall reporter
Croydon households living in Band D homes will be paying close to £250 per month in Council Tax from April, the second-highest in all London.
A 4.99% Council Tax increase in 2025 will mean that residents are paying 27% more this year than they were before Conservative Mayor Jason Perry came into office in 2022 – yet the council is still having to go to government again for “exceptional support”, this time £136million, because Perry is unable, again, to balance the bankrupt borough’s budget.
In Greater London, only Liberal Democrat-run Kingston will be charging its residents more in Council Tax than Croydon. Kingston’s Band D annual bill is going up from £2,374 to £2,488, according to a report in the Evening Standard.
In Croydon, the benchmark Band D household Council Tax will go up by £113 from April, to a total of £2,480. With residents generally paying Council Tax in 10 instalments, that means monthly payments from April to January of £248.
Tax hikes: how the newspaper formerly known as the Evening Standard is covering London Council Tax
Much of that money is simply to pay-off interest and loan repayments on the borough’s debts, accumulated over the last 15 years.
According to Jane West, the council’s finance director, in 2021-2022 (the year before Perry became Mayor on a manifesto promise to “fix the finances”), Croydon was paying £50million a year to service its debts. In the 2025-2026 financial year, the council will be spending £71million to service its debts, which total £1.4billion, according to council papers released this week.
As Inside Croydon reported earlier this week, the council’s spending has got out of control, with a £31million overspend predicted for the current financial year and a £98million overspend anticipated in 2025-2026.
“These are enormous numbers,” said West, the council’s senior numbers person, as she sought to reassure staff who had logged on for a webinar fronted by the world’s worst comedy double act: Jason Perry and Katherine Kerswell.
The world’s worst comedy double act: Perry (£84,000 pa) and Kerswell (£204,000 pa) agree it’s all somebody else’s fault
“It’s nothing Croydon has done wrong,” said West, who has been in charge of Croydon’s finances for almost three years. She then described the council’s latest request for a £136million capitalisation direction from government as “the only option”.
During the course of the webinar, Perry and Kerswell made the case that the rapidly increasing spend by the council was due to what Perry called “hyperinflation”, with councils hit by rising costs for delivering its legally-required services in housing and children’s services. Higher costs for school transport for SEND children is also now added to the mix.
“The government appears to be almost unaware of the economic pressures local government is under, such as hyperinflation and the other demands we have in the sector,” said Perry, who barely a week earlier had had a meeting with Jim McMahon, the local government minister. Did Mayor Perry not use that opportunity to make McMahon aware of the economic pressures his council is under?
There were further complaints from the people in charge that Croydon’s annual settlement from central government was, yet again, well below what similar and neighbouring London boroughs are receiving.
Mixed messages: in a series of slides at the webinar, council chiefs claimed that the council’s overspend is a sector-wide issue, when also claiming that ‘Croydon faces a particular financial challenge’
Kerswell described it as “a really sombre day for us all”, and also described the situation as “grim”.
Extraordinarily, with the Conservative Mayor sitting beside her, the council CEO then made a strong case for rent controls.
Croydon has the third highest number of households presenting as homeless in the whole country (only the cities of Birmingham and Leeds have more), and here in south London, Kerswell said, the cost, per night, of providing temporary accommodation had risen from £54 to £71.
“The government could intervene in that and say people should stop profiteering over a really, really difficult situation for families facing homelessness,” said Kerswell.
Kerswell used a large chunk of time in the webinar to outline a justification for her penchant for spending millions on external consultants, and for an “investment” of £42million by the otherwise cash-strapped council in “digital implementation”.
Kerswell says that this programme will deliver more than £100million in “benefits” over the course of four years.
Some of the savings are also likely to come in yet another round of job cuts, with around 360 roles to go – about 10% of the council’s workforce.
But for now, after almost five years in office and with the council’s finances in no more robust a state than when she arrived, Kerswell is pinning her hopes on another government bail-out.
“I’m hoping they will give us the answer that we need,” said Kerswell.
“There will have to be a solution.”
Because whatever that might be, the council chief executive who is paid a salary of £204,000 to deliver solutions has not yet managed to find it.
Read more: Labour accuse Perry of ‘mismanagement’ of Town Hall finances
Read more: ‘Mayor and CEO are respected and provide strong leadership’
Read more: Police drop all investigations into council’s financial collapse
Read more: Mayor Perry busts his unbalanced budget with £42m overspend
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