- Croydon Labour’s financial mismanagement has required the Council to issue a new Section 114 notice.
- Official reports detail “mistakes” made in the previous Administration’s budgets – which Labour claimed were “balanced” – worth tens of millions of pounds.
- Servicing Labour’s debts costs around four times what it costs to empty the bins.
- Mayor Jason Perry said “We will now be going back to the national Government to come up with a viable plan to restore our financial sustainability.”
Croydon Council has today had to issue a new Section 114 notice, which states that the Council cannot set a balanced budget next year with the resources it has. This is a direct result of legacy issues from the previous Labour Administration bankrupting the Borough.
When Croydon Labour were in power, they bankrupted the Council. Whilst everybody knew the situation was bad, Labour were hiding just how bad it was.
Upon entering office in May, Mayor Jason Perry ordered the Council to “open the books” – which has revealed the true scale of Labour’s mismanagement. Official reports detail shocking “mistakes” made in the previous Administration’s budgets – which Labour claimed were “balanced” at the time. These mistakes include:
- Parking: Labour set estimates for parking income that they knew were totally unrealistic. The Council’s actual parking income is over £10 million less than the amount Labour budgeted for.
- Housing: Croydon Labour sold Council-owned properties for £73 million. They spent all the money, but got the accounting wrong, and at least £9 million now needs to be paid back.
- LTNs: Croydon Labour’s budget forecast that the Council would make millions of pounds by implementing many new Low Traffic Neighbourhoods. However, they didn’t work out which roads these new LTNs would be implemented on. It later turned out that this would be impossible to deliver.
These mistakes will cost Council taxpayers tens of millions of pounds.
When Labour were voted out in May this year, they also left £1.6 billion of debt. This debt costs £47 million to service every single year - roughly one sixth of the Council’s entire expenditure, or around four times what it costs to empty the bins.
Jason Perry, Mayor of Croydon, said:
“The previous Labour 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.
“Despite the hard work of Council staff, the toxic level of Labour’s debt means that Croydon is trapped in a vicious cycle. Even with Government support, the years ahead will be incredibly financially challenging for Croydon Council. Ultimately, this will mean the Council needs to do and spend less, with significant spending reductions in the coming years.
“I am determined to fix what the previous failed Labour Administration broke, 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.”