The burden of Croydon Council’s financial legacy threatens to ‘swamp’ the authority, a panel of experts have revealed.
This is the sixth in a series of reports written by the panel who were appointed by the government – Tony McArdle, Margaret Lee, Phil Brookes and Jon Wilson – in the wake of the council’s bankruptcy in 2020.
It discloses that despite the ‘good progress’ being made on cost-effective improvement to day-to day operational delivery, the scale of the challenge relating to legacy issues, including the ‘burden’ of servicing the £1.6billion debt threatens to ‘swamp’ the authority.
The report says: “The council’s progress towards normality has been steady and sustainable if a little slow.
“ The additional financial pressure on the Council’s revenue budgets brought about by the increased costs of its structural debt, however, add a degree of challenge to future sustainability which place it beyond the Council’s ability to meet.”
Three areas of critical activity which the panel has focused on have been: housing, property and finance.
The panel says that the council has responded well to the test on its core responsibilities for the delivery of day-to-day services to residents in a manner which is both operationally competent and sustainably within budget.
Adults and Children’s Services, between them account for some 70 per cent of the council’s net revenue expenditure and are making steady progress in improving the efficiency of their operations, and in reducing their costs.
But services, most notably around highways and car parking, have struggled with projections for income for this year unduly optimistic and these services will be significantly overspent this year as a consequence.
The panel said this was ‘disappointing’, but the service’s management is comprehensively getting to grips with the problem and plans are in preparation for a ‘more realistic and robust service’.
The panel said: “We have regularly referred to the pace of all of this change, which we would wish to have been faster, and have encouraged the Council accordingly.
“The Council has consistently made clear to us its intent to undertake its transformational activity whilst at the same time minimising risk through extensive research and analysis and being firmly resistant to the risk of procedural challenge.
“Whilst this certainly reinforces sound, evidence-based decision- making it also can absorb considerable time and effort – possibly more than a ‘good enough’ approach would need.”
This is the panel’s first report since May’s election when Conservative councillor Jason Perry, was elected Mayor of Croydon Council overseeing an authority with no political overall control.
The panel recognised that: “….he has made clear that returning the Borough to financial stability will be his number one priority and that nothing will be off the table in undertaking the measures necessary to bring this about.
“The Mayor has been clear with us in that he is prepared to take firm decisions around the emergent difficult issues that we refer to in this report and we believe that doing so will be essential in the light of the situation that the Council is in.
“We have found our interactions with Mayor Perry to be purposeful and constructive and look forward to them continuing in that vein. “