Croydon’s Mayor has insisted that the council is “not failing” as the prospect of a possible government takeover looms.
Mayor Jason Perry has vowed to oppose commissioners imposing tax hikes or service cuts, a stance critics say is undermined by his own record.
The row follows a government announcement last month that it is “minded to” send in commissioners to take control of the financially troubled council. Secretary of State for Local Government Jim McMahon warned that without a shift in direction, Croydon risks sliding into a deeper crisis with “no clear way out”.
In a video released shortly after the announcement, Cllr Perry pushed back against the proposal, stating: “The government should be helping us, not hindering us by heaping more pain on our borough.”
Tensions came to a head at an Extraordinary Council Meeting on Wednesday (July 10), brought forward by Labour councillors in response to the looming intervention. While the Mayor’s defiant stance won some support, many councillors expressed concern that his tone risked damaging Croydon’s chances of negotiating a favourable outcome.
Labour Opposition Leader Stuart King said he understood Cllr Perry’s frustration, but criticised the combative response: “Launching a full-throttle political attack on the government doesn’t make it more likely we’ll secure the deal we need. Your reaction was ill-considered and has harmed, rather than helped, Croydon’s prospects.”
New figures released this week show the council overspent its budget by £30 million last year, requiring £136 million in exceptional financial support to stay afloat. The council is also burdened with £1.6 billion in legacy debt, costing £70 million annually to service. This debt appears to have risen by £0.2bn in the past year.
Croydon has been under the government’s Improvement and Assurance Panel (IAP) review since it issued a Section 114 bankruptcy notice in 2020. The IAP was intended to provide oversight and challenge, but Mr McMahon’s recent report described a “lack of urgency” during the intervention and warned that the council is approaching a fresh financial crisis.
The report also criticised Croydon’s ongoing reliance on emergency funding, now totalling £553 million since 2021, calling it unsustainable. While Mr McMahon promised a “short, sharp reset”, no specific details have been shared on what powers commissioners might hold or how direct their involvement would be.
Despite his earlier video, Mayor Perry later struck a more conciliatory tone during the sweltering hot council meeting. Speaking to the Local Democracy Reporting Service (LDRS) after the meeting, he said he would be willing to work with commissioners, but added: “If we get to a position where they say council tax needs to go above the cap or that services need to be salami sliced, I will oppose those decisions.”
While there was broad agreement on the decision to work with future commissioners, opposition councillors were quick to remind the Mayor that he had, in fact, raised council tax to its highest ever level and brought forward cuts to services like libraries and youth engagement under his watch.
The Conservative-led council says it has generated over £230 million in capital receipts, including £130 million from asset sales, with another £68 million in sales planned this year. Yet despite what Cllr Perry has called “difficult decisions”, the council’s budgetary shortfall continues to grow.
Many councillors now believe only a full government bailout can break Croydon’s debt cycle, though such a move would be unprecedented. Cllr Perry said he holds regular meetings with government ministers, during which the need for a bailout is often discussed.
Councillor Rowenna Davis, Labour’s candidate for Mayor, criticised Perry for refusing to acknowledge the severity of the crisis. “To deny the need for commissioners is a blinkered denial of the financial danger we face three years into your leadership,” she said, adding that Cllr Perry’s attacks on the intervention were “insulting” to those trying to help.
Croydon Council has officially opposed the commissioner proposal in the ongoing consultation, with several local charities also submitting objections. The consultation closes on July 20, and further details on the government’s next steps are expected later this year.
