Jobs, services and care: Croydon council to make £10m cuts imminently as it declares bankruptcy

By Tara O’Connor, Local Democracy Reporter

The people of Croydon are facing imminent cuts to services after the council was forced to declare bankruptcy for the third time in two years on Tuesday.

The authority issued a Section 114 notice on Tuesday morning, declaring effective bankruptcy, and banning all non-essential spending.

As well as cutting jobs, Croydon council has proposed shutting the Whitehorse Day Centre and the Cherry Orchard Garden Centre, which is based at the Cherry Hub and run mainly by volunteers with disabilities.

The authority has asked the government to cover some of its £1.6bn debt, which costs it £47m a year, so it can have some hope of financial recovery.

It revealed a £130m black hole in the next financial year’s budget, blaming “unresolved historic accounting risks”.

In the meantime, the council will have to make a range of cuts to get back on a stable financial footing.

So far, the council has outlined 60 cuts, which would save a total of £10m. But Croydon mayor Jason Perry said there will be more to come.

Jobs on the initial list include axing the director of service quality, improvement and inclusion role, which would save £120,000 and leisure centre jobs to save £60,000.

It offers day and evening support opportunities for adults with autism, learning or physical disabilities.

Croydon Mayor Jason Perry said: “We need additional support from government, we have put forward a number of options, the idea of doing another capitalisation direction (bailout loan) doesn’t really address the problems.

“We are asking the government if they might write off that debt or help us with interest payments.

“We need a sustainable local authority. We are going to have to make cuts and efficiencies to get us to that position. We will have to make difficult decisions which aren’t easy.

“This is the start of the process. At this moment I can’t say we are cutting X, Y and Z as we are going through that process.”

The council also hopes it can bring in £100m by selling off a range of assets including The Colonnades retail park in Purley Way.

Leader of the Labour opposition, Councillor Stuart King, said it was a sad day for Croydon.

He accepted the previous administration “made mistakes” but accused Mayor Perry of scoring political points.

He said: “During a cost-of-living crisis it is imperative that political leaders put their differences aside.

“Labour is under new leadership and is committed to working cross-party to clean up this mess.”

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