by Michael Swadling, Croydon Constitutionalists
The recently announced 15 per cent council tax hike for the residents of Croydon is devastating news. Like the rest of the country, we are already being hit by increased heating costs, general inflation, and the 70 year high tax burden. The planned ULEZ is an additional hammer blow coming our way. All this whilst services continue to be slashed.
In November the council issued its third Section 114 notice, effectively declaring bankruptcy. The council is a staggering £1.6 billion in debt, with £47 million in annual debt repayment and had to go cap in hand to the government for a bailout of £269.6 million.
The consequences of years of failure to control borrowing and spending by the previous administration are now being borne by the local taxpayers.
Were it not so impactful on those who can least afford it, you could almost admire the thoroughness with which the council undertook its hatchet job on the borough’s finances. In just 8 years this included:
Cost overruns at Fairfield Halls of £37.5 million and New Addington Leisure and Community Centre of £10 million
23 staff receiving over £100,000 in 2020 when Barnet, a similar sized borough made do with just seven
The highest average councillor allowance in London in 2018/19 at £21,784
Failed commercial property speculation with Croydon Park Hotel being sold for £5 million less than its purchase price just two years earlier
Failed residential property speculation through Brick by Brick, a company financed by £214 million worth of loans from the council, which years into operation failed to make a single repayment and is now in the process of being wound up
Two ‘Report in the Public Interest’ audits issued on ‘serious concerns about the council's financial situation’ and ‘the Fairfield Halls refurbishment’
£40 million being wrongly taken from the fund for social housing
- A series of gimmicks and pet projects such as solar-powered bins and a 2019 ‘Culture Growth Fund’ of over £750,000, which included £160,000 to the Boxpark entertainment venue
While this spending spree was happening, the council was failing to deliver on basic services. The Children’s Services department was rated inadequate. £1.1 million was spent developing Surrey Street Market but resulted in fewer traders. When councils were tasked with making urgent payments of grants to local businesses during lockdown, Croydon was in the bottom 10% of payments made against targets nationally. Eventually it all had to come to a head, and all the failure had consequences.
We will be paying for this mess for years to come, even if the council’s request of the government to write off £540 million of its debt is agreed. Unprecedented though this would be, few at the council see any way forward without it.
Perhaps the most enduring impact of the last administration was the failure to work with Westfield in a timely manner on the redevelopment of Croydon town centre. The administration oversaw a period where the town centre went from being, admittedly, an outdated but still major shopping centre, attracting shoppers from much of Kent, Surrey and Sussex. That’s turned into an increasingly empty zone which has lost most of its shops and night-time entertainment. The dereliction of the town centre with no serious plans announced to improve things, is a major blight for the borough, with many residents now just avoiding an area that used to attract people for jobs and leisure.
To compound all of this, London Mayor Sadiq Khan is proposing to bring most of outer London into the ULEZ zone. This will charge motorists with older, higher emission vehicles £12.50 a day for driving them. Hurting household budgets and stopping people using perfectly good vehicles, this will impact small businesses and indeed those who can least afford it. Beyond that, this will further reduce traffic coming into Croydon for shopping from the neighbouring home counties.
It's also hard to see what’s fundamentally changed at the council. There’s still huge amounts of savings that could be made. Croydon is the London Borough of Culture for 2023. As part of this they are committed to spending £522,500 in 2022/23, and propose another £452,500 in 2023/24. Additionally, £1,350,000 will come from the GLA, and £1,900,000 is expected from Arts Council England and National Lottery Heritage. Spending public funds on arts that are not viable commercially or via voluntary donations as the council has been doing for years, is no less of a waste of money when it comes from someone else’s funding stream. Lessons must be learned, and the unnecessary pet projects must stop.
In March, the council’s Appointments Committee will consider referring former members and officers to the police and their professional bodies for their part in the financial failure. If action can be taken, it will at least bring some solace to the town that those responsible for this litany of failure may pay a price - just as residents surely will.