Croydon Cabinet Financial Strategy

Croydon Labour has inherited the Tory set budget for 2014/15. In a report to the Cabinet meeting on 14 July it has begun the process of amendments, but given the longer-term cuts to Council income from the Government it will take more time to work out whether it has any further room for manoeuvre this year, and what its priorities will be for 2015-18. It faces an enormous funding crisis, but crises do provide opportunities for new thinking about how things are done. The Tories saw it as cuts and privatisation of continuing services. The latter appears to save money but actually leads to reduced service because the contractors have a profit to make, and if the Council does not have tight monitoring and exercises its right to levy penalty charges due to failure to deliver contractual standards.

There are many challenges Labour faces, but the most difficult is the reduction in resources running alongside the increasing need for services.

The report states: ‘The 2011 Census showed that Croydon’s population had grown by 10% over the last ten years making it the biggest borough in London with 363,400 residents. This is one of the highest increases across the London boroughs. Croydon has the largest population of 0-16 year olds in London (at 84,027 residents) which makes up 23.1% of the population. Life expectancy is increasing with expectancy for men and women now at 79.6 and 83.3 years with consequences for social care.

Overall, Croydon has become more deprived between 2004 and 2010 and all electoral wards have become more deprived relative to England. The impacts of these changes will have to be factored into the expected demand for our services over the medium term.

This will present a significant challenge to the Council as due to the freezing of the need based elements in formula funding, population changes either in terms of the total population or the changes in relative size of the various population groups, elderly, children and working age, will not result in any change in government funding to meet the specific needs of those age groups. ONS projections show that by 2020, the time of the next ‘reset’ of business rates retention, Croydon’s population is expected to grow by a further 25,000.

Additionally variations in need following population migration resulting from the squeezed inner London housing market will have to be met from Croydon’s existing resources.’

Fortunately for Labour the 2014/15 budget position is slightly better than the Tories had projected. While Depasrtments overspent by £5.063m mainly ‘on care packages for personal support, an increase in the assessment caseload in the Children In Need Service and Temporary Accommodation, including Bed & Breakfast due to an increase in demand for the service, however an underspend on interest costs, additional grant income and the use of contingency has meant there is an overall £2.886m underspend.’

This has enabled the new administration to put rhe £2.888m into ‘earmarked reserves to support’ its new priorities.

It has already decided on the spend of £552k on the Cleaner and Greener Croydon initiative (£249k), the Fairness Commission (200k), the play streets initiative (£23k), increased contribution to Upper Norwood Joint Library (£48k), webcasting for Cabinet and Council (12k), free swimming for children during the summer (!0k), reinstatement of the Arnhem twinning (10k).

The current projected budget gap for 2015/16 is £34.458m, and for 2015/18 £92.781m.

The debt costs of Bernard Weatherill House hang like a sword of Damacles over the Council.  The total cost was £133.7m. But there is also £85m interest on the loans incurred. The new administration is reviewing how these costs can be reduced.


About seancreighton1947

Since moving to Norbury in July 2011 I have been active on local economy, housing and environment issues with Croydon TUC and Croydon Assembly. I am a member of the Love Norbury Residents Associations Planning & Transport Committees, and Chair of Nobury Community Land Trust. I write for Croydon Citizen at I co-ordinate the Samuel Coleridge-Taylor and Croydon Radical History Networks and edit the North East Popular Politics database. History Project.. I give history talks and lead history walks. I retired in 2012 having worked in the community/voluntary sector and on heritage projects. My history interests include labour movement, mutuality, Black British, slavery & abolition, Edwardian roller skating and the social and political use of music and song. I have a particular interest in the histories of Battersea and Wandsworth, Croydon and Lambeth. I have a publishing imprint History & Social Action Publications.
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