Croydon council could be directed by Government if finances are not brought under control

By Tara O’Connor, Local Democracy Reporter

Croydon council could be told what to do by a government-appointed panel if it does not make adequate progress as it continues to battle a financial crisis.

It comes as the council will be given another £224million bailout loan and has asked the government to write off £540m of its debt.

In April, Croydon residents will see their council tax bill increase by 15 per cent after the council was forced to declare effective bankruptcy for  third time at the end of 2022.

In a statement issued on Thursday, minister for local government, Lee Rowley, said the council has “struggled to resolve serious governance and financial issues for several years,” but said positive steps were now being made.

Mr Rowley said the government was now minded to put in place an “intervention package” as the council is not meeting its “best value duty”. This is a requirement for local authorities to work economically, effectively and with efficiency.

The update outlines that if the council is not seen to be making satisfactory progress it could have to follow instructions from the government-appointed Improvement and Assurance Panel.

The panel, chaired by Tony McArdle, was set up in 2021 in the wake of the council’s first bankruptcy notice and reports back to the government on the authority’s progress.

The council’s opposition Labour group said locals had already “lost confidence” in the council after the 15 per cent tax increase.

A spokesman for the Labour group said: “In a damning judgement the Conservative government has declared Conservative Croydon a failing council that is not meeting its Best Value Duty to residents.”

The council has until March 30 to make any comments on the government’s proposal.

Croydon mayor, Jason Perry said he welcomed the move from the government.

He said: “Given the additional £224m of capitalisation directions agreed last month, and our request for an unprecedented debt write-off, it is understandable that government wants to formalise our current improvement arrangements as a precautionary measure in light of the additional historic issues which have been uncovered.

“I welcome the continuing focus government and the Improvement Panel are giving to support our goal of returning sustainable local government to Croydon and reducing the £1.6billion toxic debt level inherited from the previous administration.”

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