Croydon council forecasts possible £19m overspend

By Tara O’Connor, Local Democracy Reporter

Croydon council is forecasting a possible £19 million overspend this year as its new mayor has partly blamed a shortfall in parking fines.

Speaking about the budget black hole, mayor Jason Perry also warned the borough’s finances were ‘built on sand.’

A report, due to be discussed by Croydon’s cabinet next Wednesday, said that the council could be left with hole of almost £19.3million in the budget at the end of the financial year.

It comes two years on from the council having to declare effective bankruptcy and be bailed out by Government.

The latest forecast overspend is put down to less income from parking charges and traffic fines.

The report also reveals there is a defect in the housing benefit budget for 2021/22 which “should have been recognised earlier” and a £3.15million overspend in the Housing Revenue Account, a ring-fenced budget.

In the report Jane West, the council’s director of resources, writes: “Note that a further number of risks and compensating opportunities may materialise which would see the forecast year-end variance change.

“Should all these risks materialise, and none of the mitigations be effective, the Council is forecast to overspend by £19.290m.

However, if none of the risks materialise and all the opportunities are delivered, the council will underspend by £3.614m.”

Croydon mayor, Jason Perry, said the finances of the council were “built on sand”. He said: “The reality is that the finances of the council are much worse than anybody could have anticipated.

“Now through the opening the books process we are really digging deep into how the budgets have been set and how the finances have been operated.

“There are three issues which altogether come up to £19 million of problems. If they had been properly budgeted in the first place the budget would be in balance.”

Pictured top: Croydon town hall (Picture: Grahame Larter)