Croydon Council is proposing a 2024/25 budget that will see the council build on its strong progress in fixing its finances, while providing everyday services to London’s largest borough and investing in residents’ futures. Croydon is proposing to spend more than £400m in providing the everyday services that matter most to its 390,000 residents, from protecting vulnerable children and adults, to collecting the bins and cleaning the streets. The proposals outlined account for the rising demand for services, such as essential social care, together with inflation.
At the same time, Croydon Council is changing to become more efficient and better-run. The budget plans include investment in modernising and improving the way the council delivers services, to meet the needs of its communities now and in the future. This means that Conservative Mayor Jason Perry will not be proposing to increase Council Tax more than the Government Referendum Cap. Instead, a 2.99% council tax increase is proposed, together with the 2% for adult social care that the government expects all councils to levy, making a total increase of 4.99%.
The MTFS sets out how Croydon’s financial position has stabilised in the past 12 months, as the council continues to make progress in tackling its financial challenges.
This follows the ‘Opening the Books’ exercise launched by Mayor Perry in June 2022, to grip and tackle head-on the ongoing impact of Labour's historic financial and governance failures at Croydon. Since then, the council has taken a series of tough decisions locally to get its finances back on track. The Government has noted Croydon’s strong progress in tackling its financial challenges under Mayor Perry’s leadership.
Despite this, the borough continues to grapple with the legacy of past financial mismanagement. Next year Croydon will spend £64m of its budget on servicing debt – £320m of which is not backed by assets and therefore toxic - before it spends any money on local services.
To address this, the council has requested continued government support over the next four years, including £38m in 2024/25. The budget proposals for 2024/25 are based on receiving that in some form of extraordinary financial support from government.
However, the council has been clear that more borrowing is not a solution. Croydon will need a bespoke package of support - preferably through a £540m debt write off - if it is to become financially sustainable. The alternative of further permission from the government to borrow more money would simply pile more debt onto the Council. This may be necessary in the short term but is not a long term solution.
Jason Perry, Conservative Mayor of Croydon, said:
“We are making strong progress and Croydon is undoubtedly in a better place than last year, but the council is still facing real challenges.
“I promised I would fix Labour's financial mess and get the council back on track. Unfortunately, that means making some difficult decisions in the short-term to secure Croydon’s future. I know residents are rightly angry that Croydon is in this position and as Mayor, I am doing everything in my remit to ensure that those responsible are brought to account.
“I also promised I would listen to local people and it is important that they have their say on our plans for next year. Please do get involved and share your views in the Council's survey when it launches next month.
“I must be clear that, although I welcome the Government’s confidence that Croydon can lead its own recovery, the legacy of past financial mismanagement and the council’s toxic debt burden means we cannot do it alone. Government support is critical to balance our budget next year and more borrowing is a short-term fix, not a solution. I will be continuing to make the case for our borough and working with the government to secure the right support package for Croydon.”
