Croydon’s budget proposals for 2025/26 set out how the council is responding to unprecedented funding challenges and delivering major change to provide residents with efficient, cost-effective services.

Like councils across London, Croydon is experiencing extreme funding pressure due to rising demand for services – such as homelessness help and protecting vulnerable children and adults – together with the increased cost of living.

But Croydon also bears a historic £1.4bn debt burden, which in 2025/26 will cost the council £69m – 16% of the council’s core spending power.

In the past three years Croydon has achieved £137m savings – more than any other council in London – and with £30m planned for 2024/25.

The budget proposals include a range of actions to help address the budget gap for 2025/26, including a further £22m savings.

Croydon is proposing a 4.99% council tax increase for next year, in line with the estimated referendum cap set by the government for all London councils. The Executive Mayor of Croydon has pledged not to increase council tax above the cap.

The extent of the challenge means that in 2025/26, Croydon will continue to need support from the government.

In previous years, this support has been in the form of a £38m capitalisation direction to address the council’s debt burden. Rising demands mean this will not be sufficient to cover the budget gap for 2025/26, and the council will not be making a formal request until the government reveals its spending plans in the Autumn Statement.

The council’s budget proposals set out how the council is taking action to help address these challenges in the longer term, through its transformation plan Future Croydon.

This includes:

  • organising to become the most cost-effective council in London and provide a better, more efficient service for residents.
  • working more closely with public, private and voluntary sector partners, changing how some services are delivered to better meet residents’ needs.
  • acting more effectively as ‘one council’. This means making it simpler for residents to get in touch, access council services, and find information, advice and support, including ‘self-service’ digital options where appropriate.
  • restoring pride in Croydon’s places, with a focus on attracting investment into the borough to regenerate the town centre and local neighbourhoods.

In addition, the Executive Mayor is lobbying the government for a fair solution to the financial situation and debt he inherited. Capitalisation directions are not a sustainable solution, as they are more borrowing which adds to the council’s debt burden long term.

“My top priority is to fix our council finances so that we can provide Croydon residents with the good services and value for money they rightly deserve.

“In the past two years, through a relentless focus on robust financial management, we have made more savings than any other council in London. Our strong progress in improving our council has been recognised by our government-appointed independent panel.

“Yet as we develop our budget proposals for next year, we are being impacted by a recent and severe escalation in the financial pressures facing all councils. On top of these unprecedented challenges, Croydon is servicing a £1.4bn historic debt burden. That is neither sustainable nor fair on our taxpayers and I have written to the Secretary of State about the need for an urgent solution.

“In our 2025/26 budget, we set out the action we are taking to help meet these challenges, from making savings, to robust financial management and transforming the way we work to put residents first. But we need a response from the government on the funding crisis facing the sector – councils across London have raised these issues and I look forward to their response in the Autumn Statement.”

Jason Perry, Executive Mayor of Croydon

The budget proposals for next year have been published today as part of the council’s Medium Term Financial Strategy, which will be considered by the cabinet on 16 October. Read the report here.

At next week’s meeting, the Executive Mayor and cabinet will be asked for approval to start a budget engagement exercise, asking residents, businesses and partners for their views on the proposals. If agreed, the budget engagement will start later in October, with details to be shared soon.