Croydon Council downplays its future financial problems

The financial report to Croydon Council’s Cabinet on Monday 11 July seems to downplay the problems it will face over its future finances.

It is pleased that in 2015/16 that it ‘underspent by £1.161m as a result of:

  • a review of all agency staff and only essential vacancies being filled.
  • a freeze on all permanent staff recruitment for a period during the year.
  • a Think Family programme focusing initially on the top 50 most expensive families who use multiple council services to make efficiencies through a joined up approach.
  • the Gateway (looking to make more of the support at the front door to prevent service users coming in later with more expensive issues) and Community Resources projects (looking at making better use of community resources and the voluntary sector).
  • a review of fees and changes.
  • additional governance measures put in place for Social Care placements.

It thinks it is in ‘a strong position as regards the medium term, 2017/20. Savings have been identified for 2017/18 and 2018/19 and the expected budget gap for those two years at this relatively early stage is under £10m. The government has provided a degree of certainty on the reductions in funding until 2020, the end of the spending review period.’


‘However this is subject to future decisions of the government based on the economic position and  …. risks, notably following the EU referendum result.’

Despite being forced to make over £100m in cuts (what it calls ‘efficiency savings’), the current budget gap for the period 2017-18 to 2019-20 is estimated at £21m.  But this is based on the assumption ‘that future funding reductions will be based on the 2016/17 settlement which also gave details of the provisional settlement allocations up to and including 2019/20 based on the Spending Review.’

The General Fund balance of  £10.7m seems healthy in that it is 4.2% of the budget ‘which is well above the 3% minimum considered prudent.’

There are several problems.

  • The 2016/17 Public Health grant of £22.466m which is expected to be cut by a further £1.7m by 2019/20.
  • There remains uncertainty over the long term funding’ of support for unaccompanied asylum seeking children ‘which creates a risk.’
  • Housing costs payments for people living in the Council’s temporary accommodation are being paid 4 weeks in arrears under Universal Credit, with arrears of £211,084.
  • The proposed redevelopment of the Whitgift Centre, due to commence in January 2017, will lose the Council business rates income for at least three years.

Funding shortfall re-Croydon’s population

Population estimates always seem to be lower than reality. The Office for National Statistics (ONS) projected that Croydon’s population would be 350,100 in 2011. The 2011 Census showed 363,400. This underestimate was 3.8% compared with London as a whole of 1.3% and nationally of 0.7%.

The Government calculates its grants to Croydon on population under-estimates. In consequence the Council calculates that it loses £13.6m per year based on that under-estimate. But Croydon’s population has continued and will continue to grow. The mid-2014 estimate was 376,040, of whom those aged 0-16 population was 87,339 (23.2%).

The Council warns that ‘If there is a demographic shift as part of the population growth this could also put an additional strain on a number of service budgets.’


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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