When I was elected Mayor, Croydon was facing one of the most serious financial crises of any council in the country. Years of poor Labour decision-making had left local people with record debt, services stretched to breaking point and an organisation in desperate need of transformation. Putting Croydon back on a stable footing was never going to be quick or easy, but I made a clear commitment that we would confront the problems honestly and get the basics right. The first step I committed to was to ‘open the books’ - what we found made clear that the position was even worse than we had all feared.
The latest Medium Term Financial Strategy, along with the independent review from the Government appointed Commissioners, shows that the work we have been doing is beginning to make a difference.
It is not the end of the journey, not by a long way, but it confirms that Croydon is moving in the right direction.
Debt has been stabilised for the first time in years
One of the most important steps forward has been stabilising the Council’s historic debt. When I took office, Croydon’s borrowing was increasing at an unsustainable rate. Through tighter controls, a more disciplined capital programme and a consistent focus on value for money, we have brought that under control.
This does not remove the legacy of the past, and we can’t know what will happen in future. But it does show that the financial chaos many residents feared is no longer the default direction of travel.
Commissioners recognise stronger financial management
The Commissioner review highlights clear improvements in the Council’s financial discipline. They note that our due diligence processes and planning assumptions are now much more robust. They also highlight that Adult Services is underspending its budget this year and that there is effective management grip in that area. These are important signs of a healthier, more responsible organisation.
The Commissioners also recognise that officers are working hard and that the Council has taken a realistic and honest approach to the scale of the challenge ahead. This is exactly the cultural change Croydon has needed for many years.
There is still a long way to go
We are steadily making progress, but no-one should pretend that Croydon is financially sustainable yet. The level of debt we inherited from Labour remains severe and pressures from homelessness, adult social care and children’s placements continue to grow. The transformation programme is underway and will take time to deliver. Exceptional Financial Support will still be required in the short term. And the national economic picture will, of course, impact us hugely: whether its increased employer NICs, energy costs, or other changes on housing, welfare or health policy - we will have to weather these as best we can.
Local people deserve the truth, and the truth is that repairing Croydon’s finances will take continued discipline and hard choices.
Fair funding from Government is now crucial
The most significant long term fix for Croydon’s finances is fair funding. For many years, Croydon has been underfunded compared with other boroughs despite having higher levels of need. The Government’s Fair Funding Review is the first real opportunity to correct this. Early modelling shows that Croydon stands to benefit from a more accurate, up to date assessment of population and service pressures.
Fair funding is not a windfall. It is Croydon receiving its fair share of national resources. Without it, no council in our position could become financially sustainable, no matter how hard it tried. It’s why we have written to the Secretary of State for Local Government, the Rt Hon Steve Reed MP, to urge him to deliver the necessary changes at pace to support Croydon’s recovery.
It won’t change our fortunes overnight, but it will help to fix the foundations for Croydon to start truly controlling its own destiny.
A message of realism and progress
Croydon still faces a difficult road, but the progress so far is real. Debt has thus far stabilised. Financial controls are far stronger. Commissioners are recognising improvement. Council officers are stepping up to the challenge. Together, we are rebuilding Croydon from a position of honesty and responsibility.
I will continue to push for fair funding, continue to deliver improvements and continue to take the decisions needed to put Croydon on a sustainable path. The people of our borough deserve a council that works and a future built on stability, not crisis.
There is still a long way to go, but we are firmly on our way. Let’s keep going.
