The council has welcomed government approval of a capitalisation direction that will help to balance this year’s budget and support Croydon’s plan to put its finances back on track.
Communities Minister Luke Hall has written to the council to confirm that it will allow borrowing of £120m – £70m for the financial year 2020-21 and £50m for 2021/22.
The government’s offer, which will help Croydon over the next two years, is conditional on the council delivering its renewal plans at pace and providing regular progress updates to the government-appointed Improvement and Assurance Panel.
Croydon’s Renewal Plan is a major programme mapping out proposed savings, strengthening governance and financial practices, and new ways of working to put the borough on a more sustainable financial footing.
The council formally wrote to the government in December last year to request a capitalisation direction to cover unprecedented budget pressures up to 2024. A capitalisation direction allows councils with budget pressures to charge revenue expenditure to capital, which is then paid back over an extended period.
“We welcome this positive decision, reflecting government’s confidence in our robust plans and ability to turn this council’s finances around and transform how it is run for the benefit of everyone in our borough.
“This means we can now put forward a balanced budget and it gives us a solid foundation to focus on putting those plans for sustainable finances into practice over the next 12 months.
“We have a lot of work to do and our finances remain critical over the medium term, but we have already shown in the way we have responded to the government and external reviews that we are serious about tackling our financial situation, improving how Croydon is run and providing good value services for our residents.”
Councillor Hamida Ali, leader of the council