Croydon Council warned ‘remember we are spending taxpayers money’ during financial update
By Tara O’Connor, local democracy reporter
‘We must remember we are spending taxpayers money’ was the warning to Croydon Council as it heard the latest financial update.
The council is no longer under a Section 114 notice, which bans all spending, but faces serious financial challenges over the coming months.
It was forced to issue the notice in November as it became clear it would not be able to balance its budget. Thanks to a £120 million government loan it was able to balance the budget and formally end the Section 114.
At a cabinet meeting last night (Monday, April 12) the council’s director of finance Chris Buss said that the latest financial performance report shows the ‘start of a turnaround’ of the council’s issues.
He said: “At the end of the day what we are spending is council taxpayers money, not our money it is their money. We need to be very aware of the fact we are spending somebody else’s money therefore it should only be spent if it needs to be spent.
“It is a lesson that needs to be learnt by all, by councillors and officers.
“If it is our own money we think twice about it, we should think three times about it when it is taxpayers money.”
He added that this lesson is ‘starting to be learnt’ and he hopes that it will become the new culture of the council.
But shadow cabinet member for finance Jason Cummings said it was too early to start celebrating.
The latest finance report shows that the current forecasted overspend is £69.9 million.
There are also ‘additional risks’ of £26.6 million, more than half of which relate to interest set to be paid back by council-owned developer Brick by Brick.
Cllr Cummings raised concerns about the council’s ability to build up reserves if these risks materialise – reserves currently stand at just £7.4 million,
He said: “If they materialise the whole £20 million you’re expecting to put into reserves and £7m in there are basically gone. To me this suggests we are right on the edge.”
But Mr Buss said he expects the debt from Brick by Brick will be repaid.
He added: “If I was a betting man I suspect that a substantial proportion of the interest owed by Brick by Brick ot the council will be paid back.
“How much exactly? I can’t put a figure on but I would hope that the vast majority of that will be repaid to the council.”
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