Council plans to raise council tax again as mayor warns of ‘unprecedented challenges’
By Harrison Galliven, Local Democracy Reporter
A council has revealed plans to again increase the council tax rate by the maximum amount allowed, meaning residents face a further rise of £118 a year.
Croydon council declared its intention to raise the tax by 4.99 per cent – the most it can do without calling a referendum – from April next year.
The decision means that council tax now stands at the highest ever level for the borough.
Croydon’s Mayor Jason Perry said the increase was needed due to financial difficulties and the need to address the historic £1.4billion debt it needs to clear.
If the proposals go ahead, the bill for a band D property would rise from the current level of £2,366.91 a year to around £118 more. The proposals would likely be approved with the budget, which typically happens around March.
Mayor Perry insisted the figure was not beyond what the government has recommended for councils across the country.
The council said that in 2025/26, the cost of paying off its debt would amount to £69million, representing 16 per cent of its core spending power.
In the past three years, the council said it has saved £137million from asset disposals, cuts and restructuring, with an extra £30million of planned savings for 2024/25.
The tax increase forms part of the council’s budget proposals published on Wednesday.
During a full council meeting on Wednesday night, Croydon’s leader of the Labour opposition, Stuart King, said: “This is an unprecedented position coming out of the first financial quarter. As a result, even more cuts to services are going to be required and we’re going to have to raid reserves in order to fix the gaping hole in the numbers.
“Isn’t it clear for all to see that not only are you not listening to Croydon but you’re not fixing the finances?”
Deputy Mayor Lynne Hale, standing in for an absent Mayor Perry, hit back at Croydon Labour and reaffirmed the council’s commitment to what it calls ‘robust financial management’.
She said: “It is dutiful of me to remind you why we are in this position in the first place. You brought the council to its knees and bankrupted our borough.”
Accompanying the proposals is a call from the council for more support from central government.
It expects that the autumn budget announcement, due to be made on October 30, will contain more information about Chancellor Rachel Reeves’ plans for local government.
In previous years the council has been able to rely on a £38million debt capitalisation from the government, which has allowed it to borrow or sell assets in order to meet its general expenditure.
It has said that it will have to wait until October 30 to find out whether it can continue to do so.
Mayor Perry said: “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.”
Pictured top: Protesters gathered outside Croydon town hall in April in opposition to the council tax rises and service cuts (Picture: Harrison Galliven)