Croydon Council yesterday issued a second Section 114 notice, cementing that the ongoing budget crisis the council is facing has not been resolved.
On 11th November, the council issued the first Section 114 notice, which declared them effectively bankrupt.
This second Section 114 notice is a continuation of the first, as a new notice must be issued every 21 days if the budget has not been balanced.
This means that the council cannot spend any money except on essential and statutory services, and a daily spending control panel has been set up to ensure that that happens.
Existing Croydon Council staff will continue to be paid, existing contracts will be honoured, and the council will continue to deliver services for its most vulnerable citizens.
Finance director Lisa Taylor sent a letter to councillors, informing them of her decision to issue the notice, and setting out the issues Croydon faces, including a potential £66m budget shortfall.
The council insisted that they will not be able to fix the budget crisis without support from the Government.
It also explained that talks are ongoing with the Ministry of Housing, Communities and Local Government (MHCLG) and that the council is planning to submit a formal request for help later this month.
The council is now required by law to meet in the next 21 days to consider what it can do to move forward, but it is not expected that it will be able to resolve the issues facing Croydon without external support.
The next Section 114 notice will be issued on 23rd December if the situation cannot be salvaged by then.
Hamida Ali is the Labour leader of Croydon Council and, following the resignation of Tony Newman, took over the position on 22 October, less than three weeks before the Section 114 notice was issued.
At the time of the first notice being issued she said: “The Covid-19 crisis and a decade of austerity have had a major impact on our finances but it’s clear the council has also made mistakes, and I am committed to fixing that.
“We know that we cannot do this alone and we want to work in partnership with everyone with a stake in Croydon’s success.”
Featured image credit: Robin Webster/Geograph