Croydon Council members have rejected the Council’s latest budget plan for the next financial year after a fallout over council tax and special allowance increases. The Council’s opposition also accused the Conservative-run Council of not doing enough to secure a sustainable settlement from central government and said “Croydon residents are paying more and getting less.”
The controversial council tax increase of 4.99 per cent was the focal point of the Council’s proposed budget. Despite being in line with central government recommendations, this increase would compound the rate to 21 per cent over the next two years.
While Council members across the house deemed this a ‘difficult’ decision, Mayor Jason Perry insisted it had not risen beyond what the government has recommended for Councils across the country. Opposition members reluctantly agreed with this recommendation but noted that it was ‘unfair’ on Croydon residents.
The Conservative Council thought it essential to include to provide a balanced budget. It also forms part of the Council’s plan to address the £1.4bn of debt currently hanging over it.
Debt payments make up a sizeable chunk of the Council’s expenditure, being the third highest cost after Adult and child social care. Currently, the Council is only servicing the interest on the debt and is selling off its assets as a way to do so.
Speaking to the local democracy reporting service (LDRS), Labour Councillor Rowenna Davies, who chairs the Scrutiny committee, said: “Every year to balance its budget, Croydon Council needs £38m of capitalization.
That means the national government lets us borrow or sell our assets to be able to meet general expenditure, in very oversimplified terms that means we are selling our buildings to pay for your rubbish to be taken away.
“That breaks the general sound principle of not using capital assets to fund expenditure, but we are going to have to keep doing that until we get a government deal that addresses the long-term debt that the Council faces.”
Despite the debt the Council faces, Mayor Perry told the chamber that ‘we are not in a death spiral of debt’ and that ‘it is not getting worse.’
Central government has committed to providing Croydon with an additional £38m a year to address its issues, however, opponents have called this sum a ‘sticking plaster.’ Concern about the likelihood of a central government debt write-off also persisted throughout last night’s debate.
When asked about the likeliness of a write-off, Perry said meetings with the department of levelling up were ‘ongoing.’ However, the Leader of the Opposition, Stuart King, pointed out that Croydon residents had heard this line before.
He added: “The Council are presenting a budget without a long-term deal with the government. That is not good enough and we need much more detail about what has gone on in these meetings over the last 16 months.”
Disagreement around the planned increase to special responsibility allowances (SRA) proposed in the budget was a key reason for last night’s rejection. SRA are paid to councillors who have significant additional responsibilities, over and above the generally accepted duties of a councillor.
Under Perry’s budget, SRA’s for seven of his cabinet members would increase. In response, Labour tabled an amendment to the budget calling for cuts to Conservative councillors’ pay of £150,000, which they say would free up funding for ‘fully costed’ spending on domestic violence support and housing.
However, Jason Cummings, the Cabinet Member for Finance, said this amendment was ‘petty virtue signalling’ and that they may have accepted the motion if Labour had imposed cuts on its councillors. This led to the Conservative Councillor calling Councillor King ‘the King of hypocrisy.’
The Council’s two Green members also issued an amendment to the budget, which called for an inquiry into reductions in senior officials’ salaries and a 50% cut in the allowances of cabinet and shadow cabinet members.
Speaking to the LDRS, Green Councillor Ria Patel said: “We are calling for human resources to do a pay review on the fairness of the salaries, particularly for senior officers because they seem to be more well off in comparison to the average Croydon resident. We want to make members allowances more fair.”
“Tonight went as expected and we knew we were going to vote against the budget tonight. We don’t think it’s a fair budget for the residents of Croydon.”
“Over the last two years, they have seen a proposed 21 per cent increase in council tax and residents had no say in this. Residents didn’t cause the bankruptcy but they are feeling some of the brunt of it via the council tax.”
Along with the rise in council tax, the proposed budget also contained further cuts to social services. The bulk of cuts were to be made to Croydon’s adult social care provision, which makes up a large portion of the Council’s current spending.
When questioned by Lib Dem Councillor Claire Bonham how these cuts would affect residents, Cummings responded by saying the Council is currently running a diagnostic exercise to assess their impact but promised they would still meet the needs of service users.
News of the proposed council tax increase and service cuts has not been warmly received by many of Croydon’s residents, who believe this budget closely resembles the increases brought last year.
Prior to the meeting, a small group of protestors gathered outside the steps of the town hall. The group was made up of members of the local Green Party and Trade Union Congress (TUC).
David White, a TUC member and former Labour Councillor before he was expelled from the party, told the LDRS of his concerns regarding the Council’s budget.
He said: “In the end, I’m sure the Council will agree on a budget, which involves the almost 5 per cent council tax rise, £23m in service cuts and job losses in the council. This comes at a time when we really need more funding.”
“What happened last year was that the mayor couldn’t get his budget through the first time round and they had to come back a week later.
“There has been pretty feeble opposition from the Labour group because they are largely constrained by the fact their mismanagement during the previous administration was a contributing factor to the situation we are currently in. Also, they can’t make any radical proposals because it is election year and Labour under Starmer hasn’t really got any different policies to the Tories in these things.”
At the end of the meeting, 33 councillors voted for the budget while the remaining 36 voted against it. This means the Council must return to the town hall next Wednesday (March 6) to decide on a satisfactory budget before the deadline on March 11.
Photos: Protestors gathered outside Croydon town hall last night in opposition to the council tax rises and service cuts
The Council voted 33 for and 36 against the proposal, meaning they must meet again next Wednesday to decide on a final budget Credits: Harrison Galliven/LDRS
