Croydon households owe £90.8million in unpaid Council Tax, the second-highest level in London, in what reports say is another indication of the cost-of-living crisis.
It is also another sign of cash-strapped Croydon’s poor administration, with an increasing rate of non-collection.
According to figures from the Ministry for Housing, Communities and Local Government, the amount owed to local authorities across England now stands at £6.6billion, with 1.8million residents in arrears.
Londoners owe a total of £1.4billion in unpaid Council Tax – up 11% in a year. Boroughs including Brent (£92.2million), Croydon and Hackney (£79.6million) have some of the biggest Council Tax debt arrears in the country.
Croydon’s soaring rate of unpaid Council Tax comes after Tory Mayor Jason Perry hiked the domestic levy by 27% in two years. A typical Band D property in Croydon is now expected to pay £2,480.48 per year in Council Tax – the second highest in all London (only Kingston levies higher rates of Council Tax).
Last month, local government minister Jim McMahon announced that the MHCLG is “minded” to send in Commissioners to take over the running of Croydon Council, following a highly critical report from the improvement and assurance panel which had been overseeing the council’s management for five years.
Croydon has accumulated debts of £1.4billion, and struggles to meet its repayments and interest payments on those (mostly) government loans. Earlier this year, the government agreed to provide another bail-out loan to Croydon, this time £136million, more than anything granted to the borough before.
At the government’s Spending Review last month, it was made clear that local authorities around the country will be expected to increase Council Tax by the maximum allowed, 4.99%, in April 2026 towards to increasing costs of meeting their statutory duties over housing, adult social care and children’s services.
Failure to collect Council Tax is not a new problem in Croydon.
Back in 2012, when the council’s then financial director, Nathan Elvery, was boasting that “efficiency is in our DNA”, the amount of uncollected Council Tax was up by 17% on the previous year. Croydon then was the fifth worse in the country and second worst in London for levels of uncollected tax – but then the amount missing from the payments side of the Town Hall ledger was £42.2million, a little less than half of the 2025 figure.
Households can become liable for their full annual Council Tax bill if they miss just one monthly payment, which often results in a quick escalation to bailiff action. This Draconian action has prompted calls for a change in the law.
In the (deep) red: The Standard’s map showing the boroughs with the highest levels of uncollected Council Tax
“The vast majority of those in arrears are not refusing to pay – they’re simply unable to, often due to poor health, job loss or other negative life shocks,” according to Matthew Greenwood of the Centre for Social Justice.
“Under the current rules, missing just one payment can make someone liable for the entire year’s bill within weeks, triggering bailiff action and, in some cases, threat of imprisonment.
“It’s an outdated, punitive system that fails to distinguish between those who won’t pay and those who genuinely can’t.”
National Debtline, an independent debt advice service, says that 1-in-4 callers to its helpline have Council Tax debt, averaging almost £2,000 per person.
Research found that 390,000 Londoners were behind on their Council Tax bills in March. Steve Vaid, the chief executive at Money Advice Trust, the charity that runs National Debtline and which commissioned the research, told The Standard, “Unless changes are made at a policy level, arrears are likely to keep climbing.
“We’re calling for improved collection practices, as well as greater investment in Council Tax support schemes, to prevent people falling behind in the first place.
“Arrears levels of this magnitude underline the need for urgent action across London.
“Councils have a vital role in helping residents with unmanageable bills and to ensure Council Tax – crucial to funding local services – is collected in a way that is fair and affordable.”
- Contact National Debtline for free on 0808 808 4000 or via www.nationaldebtline.org
Read more: Council’s agency staff bill includes £726 per hour consultant
Read more: Council accused of cover-up over multi-million agency spend
Read more: McMahon acts after serious concerns on ‘aspects of leadership’
Read more: Damning verdict on Croydon’s ‘inadequate’ children’s service
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Suggestion: Move the people who work on the Mayor’s publicity and get them doing something worthwhile, like ensuring that Council Tax payers actually pay their Council Tax. If there are already people working on Council Tax payments who haven’t done the job adequately but allowed these arrears to build up, sack them, the Borough would be no worse off. Croydon is the best possible example of Local Authority mis-management. I do wonder whether there are any staff there at all, and Kerswell is in fact cocking it all up on her own.
beginning to wonder why I scrimp and save to pay my council tax when so many arent …..
And Croydon levies the 2nd highest council tax in England I believe.
Is this partly due to the £90M debt incurred by residents? What is their record on debt collection? I can’t believe it’s all down to cost of living pressures. Another reason to leave a failing Borough.
Croydon is not the second-highest Council Tax in England.
Croydon Council has long struggled to get its collection rate up to acceptable levels. It has deprivation rates of an inner London borough, but receives the sort of government funding dolled out to outer London boroughs.
To be fair, if anyone is thinking of leaving Croydon, Brexit gave them more than enough excuses nine years ago.
This is the obvious consequence of years of increasing taxes for those who are struggling to get by, while cutting taxes for the super-rich. Eventually the poorest people get to the point where paying their rent and putting food in their children’s mouths has to take priority over paying Council Tax.
Council Tax is a regressive tax i.e. poorer people pay a higher share of their income on it than richer people. On top of Mayor Perry’s massive tax rises, the new Labour government’s insistence that Council Tax continues to rise faster than inflation or pay-rises is just going to make this even worse.
Income tax is a much fairer system and, even better than that, introducing a wealth tax on multi-millionaires and billionaires would provide the money we need to keep all of our public services going.
Why are we chasing people who don’t have any money in an attempt to pay off the Council’s debts instead of asking those people with plenty of money to pay a bit more? That’s why we need to keep the pressure up on the government to fund Croydon fairly out of central government funds, not local residents’ Council Tax.
Question for you Peter.
It is May 2026, and you are Mayor of Croydon (stay with me for a moment).
The authority has to pay for adult social care, children’s services and provide housing for the homeless, with about 5,000 households on your waiting list.
The government has cocked a deaf ‘un to appeals to Fund Croydon Fairly – per person, this borough gets less than similar London boroughs, by some considerable distance. And the government isn’t going to increase your funding for 2026-2027 by anything like what you’d need, never mind want.
So, Council Tax is all you have.
Do you increase it by 5%? Or what?
Osborne austerity has been going on for 15 years, with the pain of taxation outsourced to local authorities so that many have reached breaking point.
What can local council leaders do when no one is listening?
I don’t promise miracles, but I can promise to do the best that I can in any situation.
There are lots of things that Council leaders can do when no one is listening. Your question sounds like a good one for a hustings, where we can all hear what each of the candidates would be willing to do to stand up for Croydon residents.
And what’s your answer?
Bring back the Poll tax.. more people in a household use more services and should pay more….
Ha ha ha – that’s the scout’s promise Peter
Great question! Until we have a government that prioritises meeting the needs of its people over mega corporations and foreign wars we are stuck in a terminal spiral of managed decline. Wealth taxes could be part of the solution to escape the doom loop of successive governments underfunding social needs but despite public support I can’t see that happening anytime soon.
Croydon Council has around £900 million in property assets including Fisher’s Folly, Fairfield Halls and even the Town Hall itself. Perhaps selling some of these white elephants to pay off a large chunk of the debt, reducing crippling interest payments, might free up enough money to properly fund statutory services for a few years. Without systemic change this transfer of public wealth to private corporations would only delay the inevitable collapse of public services.
Wasn’t the poll tax the start of the end for Maggie Thatcher? There were riots in the streets. My solution – sack the whole lot and bring in competent, efficient administration. The housing waiting list is long and there are no quick fixes to that. Do what other local governments are offering… send people up north where the housing pressure is less. They complain about having no family or friends or connections up there… they soon will with 5000 families dispersed about the place. But the problem (I believe) is each council needs to be run like a business. Any business that fails is closed down and replaced by a more efficient competitor. Sack the whole lot. Let everyone reapply for the job, whilst looking at every operational aspect and improving efficiencies. It’s tax payers money going to this and if council tax isn’t being paid it could be people are silently protesting against the so called services they’re supposed to be receiving!
Businesses don’t have to provide statutory functions though – that’s services required by law not just “nice to haves” or what people want to buy.
A business can just close down an unprofitable subsidiary. If other businesses don’t want to provide the same good andservices they don’t have to.
A council simply can’t shut down the social services or refuse departments. Other councils can’t just make a takeover offer to run another council.
And unlike businesses who can just increase prices Councils are limited by law as to how much they can increase council tax (unless they either get a specific exemption from the government or take it to a referendum).
All very well known. Rayner is after giving councils more power to raise taxes, so we can expect more pain.
We are subsidising these freeloaders
Why can’t Croydon get a proportion of these tax dodgers earnings?