CROYDON IN CRISIS: As government bails out cash-strapped council with record amount as part of £1.5bn provided across 30 local authorities in England, the borough’s elected Mayor was out on the piss.
PLUS: There’s £40m provided to Lambeth to sort out its housing mess
Croydon is one of 30 councils in England who have been granted government “bailouts”.
The Ministry of Housing, Communities and Local Government made the announcement last night, including granting cash-strapped Croydon’s application for its now-annual capitalisation direction, this time for £136million – the most that the south London council has ever requested and almost £50million more than any amount allocated to six other boroughs in the capital.
Lambeth is also to receive a £40million bail-out, but this is specifically to manage “financial pressures” within its Housing Revenue Account, a consequence of years of mismanagement of housing in the borough which began when Steve Reed OBE was council leader in Brixton.
Lambeth is the only council to receive such allocated funding.
Across the country, the government has allocated a total of £1.5billion to aid financially stricken councils on the brink of bankruptcy.
Out on the piss: Mayor Jason Perry was hard at work last night playing games in Boozepark
The announcement comes ahead of next week’s Town Hall budget and Council Tax-setting meeting in Croydon.
As the MHCLG was making its announcement, Croydon’s Mayor, Jason “Fix the Finances” Perry, was out in Boozepark, playing shuffleboard. One of his lackeys will no doubt update his register of interests to reflect the Mayor having received a pint of light and bitter, which they will value at three shillings and six.
For 2025-2026, Croydon and other London councils receive:
- Croydon: £136m
- Havering: £88m
- Barnet: £55.7m
- Newham: £51.2m
- Lambeth: £40m
- Haringey: £37m
- Enfield: £10m
The funds are “to ensure the delivery of public services, protect community assets and promote economic stability”, the ministry said.
“Our long-term commitment is to fix the foundations of local government, including reforming the outdated and inefficient funding model by bringing forward the first multi-year settlements in a decade, creating an updated and fit-for-purpose assessment of need and reforming the local audit system to provide transparency, security and stability to council finances,” the MHCLG statement said.
“However, there are councils in financial difficulty in need of immediate help, and a record number of councils have reached out to the government asking for Exceptional Financial Support to help them balance their budgets this year.”
With the latest government bail-out, that brings the total handed to Croydon in exceptional financial support to £308.4million (including a backdated £9.4million for 2019-2020).
Of those multi-million sums, £249million has been requested while Perry has been Croydon’s executive Mayor – a period when, subject to approval in the Town Hall Chamber next week, Council Tax has been hiked by 27%.
Of the other two-dozen councils across England receiving exceptional financial support, only the City of Birmingham, with £180million, is receiving more than Croydon.
Will Jim fix it?: Jim McMahon, Labour’s local government minister
Jim McMahon, the local government minister, said, “We are under no illusion of the state of council finances and have been clear from the outset on our commitment to get councils back on their feet.
“Be assured we will offer a relationship of partnership – not punishment – in our joint mission to improve public services for communities and create economic stability.”
Included in last night’s announcement was the news that, unlike the previous Conservative government, councils would no longer be charged an additional 1% interest on their capitalisation loans, as Croydon has experienced since 2021.
Three councils – Birmingham, Bradford, and Windsor and Maidenhead – will each be allowed to issue cap-busting Council Tax bill increases of up to 10%. Croydon will be staying within the cap for a 4.99% increase for 2025-2026.
Croydon is among six councils in the Section 114 club, in special measures after declaring effective bankruptcy – the others being Birmingham, Nottingham, Slough, Thurrock and Woking.
The allocation of the settlements cuts right across the country, and comes regardless of the political control of the councils. Councils granted special borrowing packages for the first time include Newham (Labour), Shropshire (Conservative), Swindon (Labour), Trafford (Labour), West Berkshire (Liberal Democrat), Wirral (No overall control), Enfield (Labour), Halton (Labour), Barnet (Labour), Solihull (Conservative), Worcestershire (Conservative) and Worthing (Labour).
The exceptional financial support packages enable councils to take out capital loans to fund revenue spending, on the basis they will pay down the debt in future by disposing of assets and cutting back on frontline services.
By Ken Pyne, from the latest Private Eye
But in another change from Tory policy, the government has imposed conditions preventing the councils from selling what it calls “community and heritage assets”, to discourage desperate councils (eg Croydon under Perry) from conducting fire sales of parks, libraries and artworks.
The increase in the number of exceptional support packages year-on-year – up by 50% since 2024 – reflects rapidly deteriorating municipal balance sheets at councils all over England.
And while welcomed as a short-term fix, the bail-outs only load additional debt on to councils. Croydon’s £1.4billion toxic debt will see the council spending £71million – about 16% of its total budget – just on loan repayments and interest in 2025-2026.
Read more: Council Tax hits £2,500 per year as debts continue to mount
Read more: ‘Mayor and CEO are respected and provide strong leadership’
Read more: Mayor Perry busts his unbalanced budget with £42m overspend
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“… the government has imposed conditions preventing the councils from selling what it calls “community and heritage assets”, to discourage desperate councils (eg Croydon under Perry) from conducting fire sales of parks, libraries and artworks.”
Does that include selling – whoops! – “leasing” Heathfield House (at well below market value)?
Funnily enough, Arfur, I don’t think that flogging-off/”leasing” Heathfield was Perry’s idea, because he is so clueless. It seems to have come from the Government-appointed panel who now run Croydon. Now that Croydon has somehow received bailout cash, does that mean that the fire sale of Croydon’s property assets also ceases? This will disappoint piss-poor Perry, who probably wanted to sell all council-owned property to his Tory mates for knock-down prices ?!
I am grateful for Perry’s negotiating skills and for winning a record bail-out that we didn’t really deserve because of successive fuckups by both extreme left and right administrations. Not so happy that the burden for Croydon’s failures will be laid at the door of all the country’s tax-payers
At least one person still loves Jason Perry.
Happy to enlighten you Christopher. Not even Perry refers to “negotiating”.
In his own words in the latest council press release (or rather those carefully crafted for him by a taxpayer funded propagandist) “the government has accepted our request for £136m exceptional financial support”
Loves? That’s a bit strong!
Funny, I heard that, behind the scenes, government negotiators praised his tough, uncompromising, stance.
You hear lots of unattributable things. Are you simply hearing voices now?
WHY have the (labour-run) National government bailed out the Tory mayor of
Croydon? Although Croydon Council was under Labour control when it originally went bankrupt, Even the previous Tory national government weren’t fooled by his begging bowl in his first please for money. Piss-poor, powerless Perry was elected nearly three years ago, promising to “fix the finances”, but he has done absolutely nothing useful, continuing to spend money like water, put up council tax by 27% and take an ever-larger begging bowl to (national) government for bail-outs. We probably still have to wait until next year (2026) to get rid of Perry, but can we also get rid of the directly-elected mayor post, which was NOT a “bit less shit” but has turned out to be a “whole lot more shit”? Having dragged Croydon further into the gutter, and then offered to supply guttering to channel excess water/sewage, it should be easy enough to get rid of Perry next year, but the next (self-serving) leader/mayor of Croydon Council will probably be no better…..?! Even if Perry and the other chumps manage to set a 25/26 budget and council tax rate next week, the only consolation for Croydon residents in paying the second highest council tax in London is that we can at least pity the poor residents of Kingston who have to fork out for the HIGHEST council tax in London !?!
As the rules stand, Croydon has to wait until 2031 before it can next have a referendum on the future of a boroughwide elected Mayor.
The boroughs in London with no debt or least debt are Wandsworth , Hammersmith and Westminister. Those are the areas with the least social housing too. Perhaps we shouldn’t be too liberal with free housing for all anymore. Just imho.
There is no such thing as “free housing”. Social housing tenants pay rent. Probably the biggest collection of free housing in the country is in Westminster, where Parliamentary gravy train passengers claim back their housing costs on expenses (although not always for floating duck houses (like the late Peter Viggers). And we taxpayers end up funding all of that!
Never thought of Parliamentary passengers as freeloaders too. I guess this country loves housing criminals of all types!
Grief you’ve got a long memory! Viggers’ duck island was in 2009 … ‘Sir’ Keir Starmer’s Taylor Swift tickets were in October last year. Viggers died almost five years ago from motor neurone disease.
I’m guessing Sam is taking Housing Benefit etc into account
One small point. They are not the boroughs in London with the least social housing or even the lowest financial defict too. I believe that is Richmond.
Richmond is the only London borough which is both south and north of the River Thames (pub quiz question !)
It took me several paragraphs and trying to decipher odd terminology to learn that this and other ‘bail outs’ are loans, to be repaid with interest, not a grants from the Govt.
The impending next event of doom seems to be the legal obligation on local authorities to set a balanced budget each April. Perhaps there is still the threat of a personal surcharge on individual councillors if they do not balance the budget, or maybe that penalty was removed years ago.
Local authorities’ income is predominantly (around 75% at one time) Government Revenue Support Grant with Council Tax and any services income contributing the rest.
Local authorities argue that the Govt RSG grant is insufficient to run services, or some that the formula is incorrect compared to what other authorities get.
There are, of course, just incompetence, mismanagement, poor investment / speculation decisions etc. as highlighted by IC.
The obscure ‘capitalisation’ word confuses me. Is this selling off assets (presumably there to serve the public)?
The £136m loan just adds to the huge debt, over £1bn?, on which interest has to be paid.
As IC says, it is just delaying and increasing the size of the financial crisis for another day.
How much of this money will be sucked up by pay rises and increased pension contributions? Kerswell, her two deputy CEOs and Perry are costing at least half a million.
Negrini gambled away our money and assets and was rewarded for it.
Kerswell has achieved nothing and continues to waste millions on consultants.
Croydon had a decent retail, bar and restaurant scene but we’ve seen the biggest decline in living memory under the Negroni-crony and six-figure package Director of Planning and Regeneration Heather Cheesborough.
The borough won’t change with the same career-public servants in charge. They’re out of their depth.