MP calls for Croydon cabinet members to resign amid £120million government bailout

By Tara O’Connor, local democracy reporter

Anyone who has served as a Croydon cabinet member in the past six years should resign, claims one local MP.

This includes new leader, councillor Hamida Ali.

On Friday evening the council received a £120million government bailout so it can balance the budget this year and in coming years.

It follows a serious financial crisis at the authority which has seen a projected overspend for 2020/21 of more than £90million.

Conservative MP Chris Philp said: “It is the biggest bail out in council history. This is a symptom of the appalling mismanagement of the Labour council.

“They are the first London council to have gone bankrupt in more than 30 years.”

He blames the financial crisis on:

• £200 million given to council-owned developer Brick by Brick
• £30 million paid for the Croydon Park Hotel, which went into administration in 2020
• £50 million spent on the Colonnades Retail Park
• £59 million loaned to Brick by Brick for the Fairfield Halls refurbishment
• £1.5 billion worth of debt (half of this was run up by the current Labour administration, it inherited the other half from the previous Conservative administration)

Mr Philp thinks that anyone involved in the cabinet should resign as councillors.

He added: “They have created this financial catastrophe, they should all resign.

“Anyone that served as a cabinet member has to take responsibility.”

Tony Newman and Simon Hall were in charge in the lead up to the council’s financial collapse, as council leader and member for finance respectively.

Both stood down from their positions at the end of 2020 but remain as councillors.

Last month, the pair were suspended from the national Labour party pending an investigation.

The suspensions are believed to be in relation to an independent investigation by the Local Government Association’s Richard Penn in relation to financial mismanagement at the council.

It’s been dubbed the Penn Report by councillors.

This is yet to be released to the public and is not expected to be published until investigations are carried out.

Councillors Hall and Newman have both previously resisted calls to resign saying instead it will be up to voters in next year’s local elections.

Cllr Ali too has said that she will not resign, she was previously cabinet member safer Croydon and communities.

Joint deputy leader of the opposition, Lynne Hale, said that at tonight’s council meeting she will be calling for the resignation of councillors Hall and Newman as well as councillor Paul Scott and Alison Butler who were cabinet member for planning and gateway services respectively.

Cllr Hale said: “It has been very good news that the government has announced it is going to help the council. I don’t think there was any other options on the table, I think the administration were firmly crossing their fingers.

“I will be raising my very serious concerns that there will be four councillors voting on a council tax increase, meaning that residents will pay up for their mistakes.

“Residents are dismayed that they are still sitting. The four councillors were really making all the decisions that have hit the most.”

As well as cllr Hamida Ali, there are seven other councillors in the new cabinet who have previously served on Croydon Council’s cabinet.

These are Stuart King, Alisa Flemming, Jane Avis, Manju Shahul-Hameed, Janet Campbell and Oliver Lewis.

The council’s cabinet is set to meet today at 2pm to discuss the 2021/22 budget ahead of a full council meeting this evening.

The council is set to vote on increasing council tax by 4.99 per cent.

Cllr Hamida Ali said: “Since becoming leader at the end of last year I have made it a priority to listen to the residents of Croydon so that we can work together to respond to the challenges we face as a borough.