If Croydon councillors fail to agree a budget by March 11, they will be breaking the law and could face financial sanctions.
The Chronicle has been told that it is ‘likely’ that exactly the same budget proposed by Conservative Mayor Jason Perry, including the 15 per cent Council Tax rise, which was voted down at last week’s meeting will be represented to Wednesday’s full council.
The budget was defiantly defeated at last Wednesday’s full council meeting by 37 to 34 with the two Green and Liberal Democrat councillors voting with Labour.
Going forward the opposition requires two thirds to block or amend Mayor Perry’s budget but the Mayor just needs a majority to pass.
Without abstentions the Mayor needs 36 votes so two more than last Wednesday and opposition would need 48.
In the event of the same ‘impasse’ unless there is a scenario where Labour are willing to camp out all night – to block something that would lead to them breaking the law – it is likely opposition councillors will eventually have to abstain and residents will have to pay 15 per cent more on their council tax bills.
The council’s director of legal service and monitoring officer Stephen Lawrence-Orumwenses (pictured), issued advice to councillors on February 23 warning in no uncertain terms of the consequences if members fail to set or delay in setting the budget.
In addition to ‘misfeasance in public office’ councillors could potentially be in breach of the Members Code of Conduct by bringing the council into disrepute and failing to act lawfully.
He says: “If any Member’s wilful misconduct in (persistently) refusing to set the budget is found to have caused a financial loss to the Council, they may be liable to make good such loss…”
He adds: “Members must work collaboratively (across party divides) to facilitate rather than frustrate the setting of a lawful budget.”
The serious consequences of not setting a budget would mean there would be no provision for the running of services, payment of staff or the ability to fulfil the council’s contractural commitments. This could result in litigation and have further adverse financial implications.
It could also give rise to a judicial review challenge by any person with sufficient interest which could include a council taxpayer.
The council has already issued three S114, bankruptcy notices and is asking the government to take the ‘unprecedented’ step of writing off over £500 million in debt.
Croydon is subject to a non-statutory intervention by the Secretary of State through the appointment of an Improvement and Assurance panel. Failure to set a budget could lead to further government intervention with the appointment of commissioners to take over some or all functions of elected members.
Each year by March 11, local authorities must set a legally statutory budget.
If Labour had wanted to put forward an alternative budget then they should have done so before the first meeting around the end of February. Jane West , the council’s Chief Finance Officer, would have then undertaken a review of this alternative budget in full before signing off that it was a balanced.
But the only amendment filed on time was from the Green Party and it was about using Community Interest Levy for cycling infrastructure.
So the deadline has passed so no alternative budget can now be presented by Labour’s cabinet lead for finance Callton Young, who spent yesterday afternoon outside the Town Hall protesting at the council tax hike with members of the GMB union.
In the signed acceptance of the office of declaration, all elected members agree to fulfil their duties as councillors to the best of their ability and judgement. These declarations apply to the duty on members to set a lawful budget.
The Mayor is required by law to prepare the council’s budget which includes the council tax base and the executive has a legal duty to present it to the full council.
It is a legal duty under the Local Government Act 2000 and the duty is both individually owned and collectively shared between all