Croydon Council effectively bankrupt in budget “tragedy”

Community leaders slammed Croydon Council yesterday after the borough announced it can no longer balance its budget.

The south London council yesterday issued a Section 114 notice, which means that the local government is effectively bankrupt and will only be allowed to provide essential and statutory services.

Croydon faces a budget shortfall of £66 million, which local Assembly Member Steve O’Connell described as a tragedy of financial mismanagement.

“It’s a tragedy for the people of Croydon because it means that presumably financial control will be taken away from the council and it’s basically gone bust,” he said.

He said: “Despite the Conservative opposition putting pressure on them for some time, they were saying it’s all the fault of Covid and austerity when it’s the fault of financial mis-management.”

O’Connell did not comment on whether Croydon’s Section 114 notice is a sign of things to come for other London councils, but he intends to ask Sadiq Khan for a comment on the borough’s financial situation.

He said: “Although it’s not really a mayoral issue, Khan does have a financial relationship with all the councils, so I’ll be interested to see how this affects that relationship.”

Two people superimposed next to one another: Steve O'Connell AM and Cllr Hamida Ali.
BUST UP: Steve O’Connell AM (Cons, left) says that Cllr Hamida Ali’s (Lab, right) announcement was a “tragedy” for Croydon

When Labour’s Croydon Council leader Hamida Ali announced that a Section 114 notice would be issued yesterday, she acknowledged that there were “a number of reasons” for the budget shortfall.

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.”

Ali, who was elected leader of the council on 22 October following the resignation of Tony Newman, said that she will prioritise protection for vulnerable residents.

Croydon Council will also continue to provide statutory services including education, social care, waste collection and road maintenance.

The council is one of only two in England to issue a Section 114 notice in the last 20 years.

The first was the Conservative-led Northamptonshire County Council in the East Midlands which faced the special measures between February 2018 and April 2019.

A spokesperson from the Labour opposition in Northamptonshire said that the need for councils to enter special measures lies “75% with the government” after austerity measures were introduced in 2010.

Cllr Danielle Stone, of Northampton, said: “It’s a national problem.

“Section 114 led to the closure of services: our outdoor education centre and libraries.

“In Northamptonshire, we’ve got over 47,000 children living in poverty.

“The number of children coming into care has doubled in the last five years and all our prevention services have gone.”

The former leader of Croydon’s Conservative opposition Cllr Tim Pollard, of Sanderstead, suggested that it is unwise to compare Croydon with other struggling boroughs.

He said: “There are 33 London boroughs and as yet only Croydon has declared a Section 114 notice.”

Pollard believes that Croydon is in a position to provide care for children in need.

However, he warned: “Other things residents like to see from their council, they won’t be seeing in Croydon because it simply can’t afford to do it.

“We need the mess sorted out now as fast as possible.

“The council’s now in a deep hole and it’s got to be dug out of it.”

A spokesperson for the ministry responsible for local government said that Croydon has been “entirely irresponsible” with its spending and investments.

The ministry said that it wants to bring Croydon “under control”.

Feature image: Robin Webster/Geograph

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