Croydon in budget limbo over council tax rise, as members veto it

By Harrison Gallivan, Local Democracy Reporters

Croydon council members have rejected the latest budget plan for the next financial year after a fallout over council tax.

Opposition councillors also accused the Conservative-run council of not doing enough to secure a sustainable settlement from central government and said “Croydon residents are paying more and getting less”.

The controversial council tax increase of 4.99 per cent was the focal point of the proposed budget. Mayor Jason Perry insisted the figure was not beyond what the government has recommended for councils across the country.

Debt payments make up a sizeable chunk of the council’s expenditure. It has a current debt of 1.4bn hanging over it. Currently, the council is only servicing the interest on the debt and is selling off its assets as a way to do so.

Labour Councillor Rowenna Davies, who chairs the scrutiny committee, said: “Every year to balance its budget, Croydon council needs £38m of capitalization.

“That means the national government lets us borrow or sell our assets to be able to meet general expenditure, in very oversimplified terms that means we are selling our buildings to pay for your rubbish to be taken away.

“That breaks the general sound principle of not using capital assets to fund expenditure, but we are going to have to keep doing that until we get a government deal that addresses the long-term debt that the council faces.”

Despite the debt the council faces, Mayor Perry told the chamber that ‘we are not in a death spiral of debt’ and that ‘it is not getting worse.’

Disagreement around councillors’ allowances was another key reason for the budget rejection.  The allowances paid to councillors have been frozen for the past two year and Labour tabled an amendment calling for cuts to Conservative councillors’ pay of £150,000.

Jason Cummings, the cabinet member for finance, said this amendment amounted to ‘petty virtue signalling’.

Prior to the meeting, a small group of protestors gathered outside the steps of the town hall to oppose the propsed council tax rise and service cuts. The group was made up of members of the local Green Party and Trade Union Congress (TUC).

At the end of the meeting, 33 councillors voted for the budget while the remaining 36 voted against it. This means the council must return to the town hall tomorrow (Wednesday) to decide on a satisfactory budget before the deadline on March 11.

Pictured top: Protesters gathered outside Croydon town hall in opposition to the council tax rises and service cuts (Picture: Harrison Galliven/LDR)