Croydon Council has put a halt to all non-statutory spending as it tries to find £130m of savings in the next financial year.
Serious financial mismanagement and governance issues have left the local authority with debt levels totalling £1.6bn. The councils currently needs to pay £47m from its budget to service this debt.
The council has delivered over £90m in savings and £50m in asset sales over the past two years, with further proposals for £44m in savings in 2023/24 and around £100m in proposed asset disposals in the coming years.
Despite these measures, however, the local authority still needs to reduce spending by £130m in the next financial year, which it warns will leave it ‘financially and operationally unsustainable.’
Chief finance and S151 officer Jane West has today issued a Section 114 notice which acknowledges that the council will not be able to balance its budget in the next financial year.
Executive mayor Jason Perry has also written to secretary of state Michael Gove setting out the need for further support.
‘The previous administration has left a legacy of unprecedented financial mismanagement, toxic bad debt and a lack of governance and transparency that shames Croydon and continues to have a long-lasting impact on the sustainability of our council,’ the executive mayor said in a statement.
‘Despite the hard work of staff to support the council’s recovery, the toxic level of historic debt means that Croydon is trapped in a vicious cycle. Even with Government support, the coming years will be incredibly financially challenging for Croydon Council. Ultimately, this will mean the council needs to do and spend less, with significant spending reductions.
‘I am determined to fix what the previous administration has broken and to protect our residents, our staff, and the borough as much as possible, but getting the council back on track to recovery and long-term financial and operational sustainability will take a long time and need radical solutions.
‘We must balance our books and become a much smaller organisation, which is more efficient and delivers priority services that support our residents, our communities and the borough.’
