Croydon Council could pay “Tory tax” of £24 million in interest after Government loan

By Tara O’Connor, local democracy reporter

If Croydon Council borrow all the money made available by the Government they will end up paying a “Tory tax” of £24 million in interest it’s been claimed.

But Labour councillor Andrew Pelling was just as hard on his own ruling party colleagues, saying the group must recognise a “culture of bullying”.

Speaking at a council meeting on Monday where a 4.99 per cent increase in council tax (including the adult social care precept) was approved, he claimed councils were pushed to take risks by a flawed council tax system.

The Government will allow Croydon Council to borrow £120 million over the next two years, meaning it can balance the budget.

But Cllr Pelling pulled no punches saying: “A lot of this goes back to a council tax system that was put in as an emergency measure when the poll tax didn’t work.

“Councils get driven to take risks like investing in property also the Government being against council housing, driving us to arms-length companies to solve that problem

“Croydon is treated by the same type of funding from government that we had when we are a suburban dormitory down, we really do need to move on.

“We must also recognise problems on the Labour side a culture of bullying, a culture of boycotting those who are whistleblowers has become infantile.

“This is the second crisis that Labour has faced while in power the previous one was the 27 per cent council tax increase.”

Cllr Pelling was leader of the Croydon Conservatives when the then Labour administration increased council tax by 27.5 per cent in 2003/4.

He went on to become the Tory MP for Croydon Central but joined the Labour party in 2011 becoming a Croydon councillor again in 2014.

A government review, published in February exposed that former council leader Tony Newman created an “inner circle of a small number of cabinet members who were controlling in their management of the council and its finances”.

It also stated that council officers were pressured to reword cabinet reports to present a more favourable picture of the finances.

Cllr Newman and former cabinet member for finance Simon Hall have both been suspended by the national Labour party.

It is believed they are being investigated following a report by the Local Government Association’s Richard Penn in relation to financial mismanagement at the council. This is yet to be released.