Croydon is proposing a budget to protect vital services for residents, while taking robust action to fix its finances and rebuild the council to become sustainable.
In 2023/24 Croydon Council plans to spend over £300m delivering services for local people. Much of the council’s budget is spent on protecting vulnerable children and adults – named by residents as their top priorities in a recent engagement exercise.
Resident priorities, gathered via survey earlier this year, also included everyday services such as rubbish and recycling collections as well as clean and safe streets. Croydon will focus on these essential services, while also transforming the way it works to become a smaller, more efficient council that does less, but does it well.
Alongside this, Croydon will be continuing to tackle its serious financial challenges and move the council towards a sustainable position, so that it can deliver quality services and value for money.
Last November, Croydon’s chief finance officer warned that the council is financially unsustainable, with £1.6bn toxic debt, and would not be able to balance future budgets without a new solution from government.
The extent of the council’s challenges was set out in the medium-term financial strategy, which highlighted past financial mismanagement and a raft of historic issues that are impacting the council’s budget today.
Croydon is in negotiations with the government to secure a new solution that will enable it to protect everyday services for residents. As part of this, Croydon has asked for government to write off all or some of the council’s debt, and requested a reduction in interest rates.
The council is waiting for government to confirm full details of a bespoke package of support including capitalisation directions to help with debt repayments.
In addition, last week the government granted Croydon permission to propose raising council tax by 15% without a referendum to help provide and protect vital services to residents. If approved by Full Council, this will mean the council does not have to make a further £22m savings in addition to the £36m already put forward – which would impact services for vulnerable people.
Included in the council’s budget plans will be extra help for people through the council tax support scheme which protects the most vulnerable from paying any council tax at all. Also, the creation of a new £2m hardship fund to protect low-income households who are struggling to pay council tax and do not receive other support.
The council’s budget proposals are set out in a report published this week for consideration by the Executive Mayor in Cabinet on 22 February, ahead of a decision by Full Council on 1 March.
“Since becoming Mayor I have made it my priority to get a grip on the council’s finances and to be clear about what the challenges are and face up to them.
“The budget proposals set out how we will do that, whilst continuing to deliver the everyday services that residents rely on and working towards becoming a sustainable council, that works for the people of Croydon.
“The last thing I want to do is propose such a large council tax increase, but Croydon has kicked difficult decisions down the line for far too long and the council is saddled with £1.6bn toxic debt as a result.
“Increasing council tax will mean we can protect essential services, but its only part of the support package Croydon will need. I’m calling on government to find a new solution to help Croydon become a sustainable council for the future.
“I know that some residents will struggle with this increase at this time and that is why we are creating a hardship fund that will help those that need it most.
“I know residents rightly feel angry about the situation Croydon is in, and I share this frustration and anger and remain absolutely committed to holding those responsible to account.”
Jason Perry, Executive Mayor of Croydon