Croydon council tax could rise by 15% to deal with ‘significant’ financial failures

By Tara O’Connor, Local Democracy Reporter

Council tax in Croydon could soon increase by 15 per cent after the government gave permission for the council to make the huge hike in the face of a financial crisis.

The government yesterday said following “significant failures” in financial management it has received requests from three English councils to rise council tax above the five per cent limit allowed, without a referendum. The councils were Thurrock, Croydon and Slough.

The decision outlined that Croydon will be able to make the largest increase of 10 per cent on top of the planned five per cent increase, compared to the other two councils, which will make an additional five per cent hike.

It said: “Following significant failures in local leadership and financial management, the government received requests from Thurrock, Croydon and Slough for the flexibility to increase their council tax by an additional amount, to provide extra funding to support their financial recovery.

“Given the exceptional circumstance in these councils and unprecedented scale of financial deficits in each council, government has agreed to the requests.”

In November 2022, the council admitted it couldn’t balance its budget for 2023/24 and was forced to issue a Section 114 notice, declaring effective bankruptcy for the third time in two years.

It estimated it would need to reduce spending by £130m in the next financial year to balance the budget, a legal requirement for local authorities. Since then, it has been in discussion with the government to come up with a plan to bring the council back on track.

The council is still waiting to hear what additional help it will receive from the government to balance its budget for the next financial year.

Time to set next year’s finances is running out, with a budget-setting meeting scheduled for March 1 and another scheduled for March 8.

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