Croydon council loaned £10m to cash-strapped authority
By Tara O’Connor, Local Democracy Reporter
Croydon council loaned £10m to a local authority in Essex under investigation over massive debts on its books.
Mayor of Croydon Jason Perry confirmed the authority lent Thurrock council the cash from its pension fund.
At a council meeting on Wednesday night, shadow cabinet member for finance, Councillor Callton Young, asked whether Croydon council was owed any money by Thurrock council.
The Conservative administration in Essex is set to borrow £836m in weekly instalments from the Public Works Loan Board (PWLB) up until March 16, 2023 to sort out its financial mess. Out of this fund, £678.5m will be repaid to other local authorities.
In September, the Government appointed a commissioner to take over the council due to its high debts and a looming financial crisis.
The Bureau of Investigative Journalism found that Thurrock had borrowed more than £1bn and invested hundreds of millions of pounds largely in solar energy projects.
Mr Perry said: “As far as I am aware the only money we have loaned is from the pension fund and that was £10m and we are assured that will be paid back. It is covered by the Public Works Loan Board.”
Cllr Perry hit back at a question from the Labour opposition, adding: “You borrowed a huge amount of money and created huge problems in this borough.
“You indebted this borough to the tune of £1.6b and you’re now looking at what another borough is doing. You need to look closer to home and the damage you have done here.”
It comes two years on from Croydon council’s own bankruptcy, from which it is still trying to recover.
In November 2020, it was forced to declare effective bankruptcy and issue a Section 114 notice when it could not balance the budget.
The council was granted £120m in Government bailout loans, known as a capitalisation direction, to balance its budget.
Pictured top: Croydon Town Hall, Katharine Street, Croydon (Picture: Tara O’Connor)
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