More to come: in the four years since Jason Perry has been Mayor of Croydon, the borough’s total debt has soared to a record £1.7bn. But his latest plan is to borrow even more
CROYDON IN CRISIS: Reports sneaked out ahead of next Wednesday’s council cabinet meeting talk of ‘difficult decisions’, after residents have already suffered six years of the consequences of ‘difficult decisions’.
By STEVEN DOWNES
Less than six months since he pushed through his latest unbalanced council budget, Croydon’s failed Mayor Jason Perry will this week look to re-set the Town Hall finances in what amounts to an admission of abject failure after four years in charge.
Perry’s got a plan. It’s a new, three-year plan. And it’s much like his previous plan: it includes the cash-strapped council taking on even more borrowing, and therefore more debt, and making even more cuts to public services – around £58million more service cuts between now and the end of the decade.
“It is deeply disappointing that residents are once again being asked to face the prospect of cuts to local services because of the borough’s long-running financial problems,” Councillor Claire Bonham, of the Liberal Democrats, said of the plan.
“The mistakes that created this situation were not made by local residents, and they should not continue to bear the brunt of the consequences.”
Councillor Bonham, in common with the majority of the borough’s elected councillors, did not get sight of this important council report until late on Friday. All just about legal, but the report ahead of next Wednesday’s council cabinet meeting was released at just about the latest time possible.
There’s good reason why piss-poor Perry and the council’s exec leadership wanted to keep this report under wraps for as long as possible.
Last one standing: Conrad Hall wants Croydon’s politicians to support his latest raft of service cuts
Perry’s plan is an admission that his previous plan, for “transformation”, that he dreamt up with his previous chief executive, Katherine Kerswell, after spending millions of public cash on various consultants, has not worked.
And the truly terrifying thing about this re-set, less than six months since the last council budget, is that this report comes with the oversight and apparent blessing of the government Commissioners, who were sent into Fisher’s Folly a year ago to fix the mess of Perry’s making.
The report’s author is Conrad Hall, the Commissioners’ hand-picked choice as director of resources and, given the imminent departure of interim CEO Elaine Jackson and the absence of any deputy CEO, the most senior official left standing at Croydon Council.
With yet more cuts being proposed, we may soon be approaching the point where the hollowed-out husk of what was once Croydon Council could soon be nothing more than some very well-paid staff (£275,000 pa for the new chief exec, if anyone is brave enough to take the role), who deliver zero public services, and whose only task is to ensure that the borough’s interest payments on its loans get paid every month.
The report, with its four appendices, comes right at the bottom of Wednesday’s cabinet meeting’s agenda. There might not be a lot of time left to discuss its contents before the Town Hall has to close for the evening.
Still paying: six years after Jo Negrini quit Croydon, the borough’s residents are still paying for her costly mistakes
The 42-page report begins ominously: “The objective of the strategy is to return Croydon to financial sustainability; able to set budgets without the need for Exceptional Financial Support. To achieve this the council will need to confront difficult decisions about the levels of service provided and the charges made for these services.” Those are our italics.
This, remember, is a report for a meeting on July 29, 2026 – close to the sixth anniversary of the widely disliked CEO Jo Negrini walking out of Fisher’s Folly for a final time, with dire warnings about the state of the council’s finances still being denied by the Town Hall’s elected officials.
Hasn’t the council been telling Croydon residents that they have been confronting “difficult decisions” for the past six years?
It gets worse. Once again, the council is talking about “managing demand”, an insidious civic euphemism for denying services to those that need them. The council says that its new plan is to manage demand “in some of the council’s highest-cost services, including adult and children’s social care, temporary accommodation and special educational needs and disabilities (SEND)”.
It gets worse still. “Since 2019-2020 Croydon has relied on £526million of ‘capitalisation directions’, funded by additional borrowing of £361million and asset disposals of £165million,” the official report states. There’s a distinctive tone to reports authored by Conrad Hall. “On the figures set out in the budget agreed in February 2026, the aggregate of capitalisation directions is forecast to reach c£900million by 2030.”
Yes. You read that right.
£900million
That’s all on top of the £1.4billion debt that brought the council’s finances crashing with a resounding thud in 2020.
Three-year plan: Conrad Hall and Jason Perry want to pile more debt on top of the existing £1.7bn between now and 2030
And still there’s worse to come: “A high proportion of the debt (c£1.1billion) could reasonably be described as ‘overhanging’ debt. There are no assets attached to it: it was either incurred in pursuit of unsuccessful commercial ventures (£545million) or to fund the EFS that was a consequence of those (£526million to date).”
And Hall admits that there’s no way that he, or anyone in Croydon, can fix the council’s debt problems.
“It is difficult to see a route out of the EFS programme over the medium-term that does not include some sort of government intervention,” Hall repeats from February’s budget report, meaning that some debt write-off, interest reduction or rescheduling of the debt is essential, but it all needs to be approved by the Treasury.
“However, to justify government intervention in the form of a debt write-off, or similar, Croydon will need to demonstrate that it has taken budget decisions that reflect its status as one of the most financially stressed councils in the country,” Hall writes.
It then gets really bad: “The focus needs to shift from internal efficiencies… to tackling high-cost areas of rising demand, such as social care, housing and provision for children with special educational needs and disabilities… Difficult policy choices will have to be confronted across the entire range of Croydon’s services. There must be ‘conscientious consideration’ of all those options, no matter how unpalatable.”
And with Tory Perry having hiked Croydon Council Tax by 33% since 2023, one of the examples given by Hall of where the new cuts might be made is the local Council Tax support scheme or LCTS.
More to come: after the 15% hike in 2023, Council Tax bills seem likely to increase by 5% each year for the foreseeable
LCTS, says Hall, “serves as a good illustration of the kind of issue that members [he means councillors] of all parties will have to grapple with”. So that’s a clear warning to Labour and the other councillors.
According to Hall, Croydon’s LCTS “is not the most generous in London”.
But he then pivots: “Other councils that face less significant financial challenges than Croydon have already made substantial savings by reducing the support provided to below, and in some cases significantly below, the current provisions of Croydon’s scheme.”
Hall is eyeing Council Tax support to Croydon pensioners, some of whom receive about £40 per week to help with their Town Hall tax. “Purely as an illustration, a reduction of 10% might save around £2million at a maximum cost to any resident of around £4 per week at Band D, from £2.67 at Band A and up to £8 at Band H.”
Hall’s report, which can be read in full by clicking here mentions openness and transparency. But there’s no real opportunity for his recommendations to be discussed at the council for at least three months.
The next meeting of full council, when the dire state of the finances might be debated fully by the borough’s elected councillors, won’t be held at the Town Hall until October 21. It’s not like it is anything urgent or anything, after all.
In another paper going to Wednesday night’s meeting of Perry’s puppets, the outcome of the 2025-2026 financial year is reported – four months after the end of the financial year.
Failed Mayor: after four years in charge, Jason Perry has made the council finances worse
This includes an underspend of £27.3million against the budget, “achieving the target required by the Stabilisation Plan”, as well as a provisional underspend of £38.6million on the capital programme, a £1.6million underspend for the Housing Revenue Account and a £13.5million underspend on the HRA’s capital programme, but a £32.7million overspend for the Dedicated Schools Grant.
The report goes on to state that these figures mean that “the necessary level of capitalisation directions”, meaning the emergency borrowing from central government agreed for 2025-2026, can be reduced from £136.0million to £108.7million. That’s a £28million reduction on Perry’s £1.7billion pile of debt.
And in Para 2.4 there’s the by-now familiar buck-passing exercise: “Note the unfunded local government cost pressures that exist nationally, regionally and locally relating to increases in demand and market prices which need to be addressed by government changes to policy and/or funding levels.”
Has any council in history ever been less willing to take responsibility for its own massive mismanagement?
At least the report contains one admission of failure: “Note the council’s historic borrowing and subsequent debt burden and national, regional and local service pressures continue to be critical to the non-sustainability of the council’s revenue budget.”
Non-sustainability. They know they can’t balance the budget.
‘Sobering’: Stuart King sees the three-year plan as an admission of failure
For Stuart King, the leader of the Labour group at the Town Hall, the three-year financial strategy plan is “a sobering assessment of the council’s finances after four years of Jason Perry”.
King told Inside Croydon: “Far from stabilising the finances, Jason Perry is now intending to request more exceptional financial support from the government . This is because the ‘transformation’ Perry promised has failed to be delivered – despite the council spending millions on expensive consultants.
“Despite this extra borrowing from government, over the next three years Jason Perry plans £58million of fresh cuts. It is clear that the bulk of the cuts will target social care services that so many of our most vulnerable residents rely upon.
“Meanwhile Croydon residents continue to pay the second highest Council Tax in London while their streets remain potholed, flytipped and our town centre neglected and derelict”.
LibDem councillor Bonham said, “I have repeatedly raised concerns about the transformation programme’s ambitions, deliverability and whether it was diverting attention from tackling the underlying cost pressures facing the council.
Bearing the brunt: residents suffer for council mistakes, says LibDem Claire Bonham
“So it is disappointing to see the report also acknowledge that this has consumed a disproportionate amount of investment and management capacity, and that some of its savings assumptions were overly optimistic.”
Bonham said that her role, in scrutinising the Mayor’s plans, will be to ensure “that short-term decisions to create savings will not have negative long-term impacts”.
Paul Ainscough, the recently elected Green Party councillor, doesn’t even think that Perry’s revised plan can work. “I’m sceptical that the strategy is deliverable,” he said.
“The test of this strategy should be practical and measurable: whether services improve, financial controls strengthen and dependence on exceptional government support reduces.
“Croydon does deserve fair funding, and it is right to recognise the pressure created by adult social care, temporary accommodation, inflation, operational weakness and financial mismanagement. However, recognition is not the same as recovery.
“Unless Mayor Perry can demonstrate effective leadership, accountability and a credible service delivery, Croydon will struggle to move from the shadow of the Commissioners.
“My fear is that patience is short, and we are facing more tough years ahead.”
Read more: £275,000: Loadsamoney Perry breaks the bank for new CEO
Read more: Kerswell takes another pay-off as she quits as council’s CEO
Read more: Perry’s cycle lane sabotage looks to cost Croydon another £7m
Read more: Perry’s go-slow council could take 5 years to pay LTN refunds
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The policy advisers around Andy Burnham need to be bold, brave and willing to think radically. The current adult social care model is financially unsustainable, placing enormous pressure on councils across the country. If his government can get reform right, it could become one of its defining achievements, not only because it is the right thing to do for those who rely on care, but because it would significantly ease the financial burden on local authorities and help put council finances on a more sustainable footing. Adult social care, alongside SEND and temporary accommodation, is one of the biggest drivers of financial pressure on many councils, and reform will be one of the only ways many of them will have a realistic chance of balancing their budgets without ripping local services apart.
This is the first honest financial assessment for probably decades. No twisting, political spinning or outright lying.
It confirms what we all knew that a BILLION POUNDS debt is down to previous Conservative and Labour councils borrowing to fund vanity building projects and then borrowing more to bail themselves out when it all inevitably went tits up. Paying well over the odds for Bernard Weatherill House is as much a reason for the debt pile as was the amateur running of Brick By Brick.
The Commissioners warned everyone that the recently passed council budget was provisional because they had no faith in the senior management either political or professional. This is actually a good thing.
What is a very bad thing is the scale of proposed cuts/increased costs which would successfully “manage demand” because so many fewer people could access to council services or afford to go private. Even statutory council functions can be priced out of most people’s reach.
No more sugar coating the failures of elected councillors for the last twenty years or so. Whoever you voted for in May the Commissioners are now in charge.
Let’s borrow another £100 million! Who gives a monkey’s? This should cover any wage increases until 2030
If the (national) government can get reform of adult social care right for most local authorities, that WILL become one of their defining achievements, but if they can make it work in Croydon, so that not even Piss-Poor Perry can screw it up, that will require a miracle !?!
More borrowing? Hey, don’t worry about it. All we need is another massive increase in council tax. Simples!
We seem to be dwelling under the illusion that there is a choice.
There is absolutely no choice for the Council other than to receive EFS for the foreseeable future.
You cannot fix the “Worst financial situation of any local authority in history” over a period of four years. This is going to take decades to fix. You cannot underestimate this scale of the problem that labour left Croydon.
The Council could sell every single asset it owned, and it wouldn’t even really dent the scale of the debt.
At least this plan puta Croydon back on track after a number of years.
Reschedule the loans and significantly reduce the interest charged (Jenrick, when he was SoS, added an extra 1% as some kind of penalty charge, without specifying who was being penalised, for example) and you would transform the position with the stroke of a pen. The debt would remain on the books (keeping the beancounters at HM Treasury happy), but Croydon’s repayments would be much reduced.
It’s been working for Argentina with the IMF for decades. It provides a practical and face-saving solution for all parties.
Labour inherited a debt of around £800m from the Tories, and then more or less doubled it. Piss-Poor has been Mayor since 2022 and hasn’t “fixed the finances” and it’s doubtful he ever will. That won’t stop him claiming the credit if the government does bail us out, or blaming Burnham if his pleas for aid fall on deaf ears