Croydon Council has declared bankruptcy again
This is the third time in two years
Croydon Council has declared bankruptcy again despite a £120 million bailout from the government.
This is the third time it's happened since 2020 with the authority having debts totalling £1.6 billion.
The mayor says since then they've made £140 million in savings and asset sales with plans for the same again in the next financial year but says it's not enough to put them on a stable footing.
Croydon Mayor Jason Perry has now written to Secretary of State Michael Gove asking for more money from the government.
Mayor Perry said: “The previous administration has left a legacy of unprecedented financial mismanagement, toxic bad debt and a lack of governance and transparency that shames Croydon and continues to have a long-lasting impact on the sustainability of our council.
“Despite the hard work of staff to support the council’s recovery, the toxic level of historic debt means that Croydon is trapped in a vicious cycle. Even with government support, the coming years will be incredibly financially challenging for Croydon Council. Ultimately, this will mean the council needs to do and spend less, with significant spending reductions.
“I am determined to fix what the previous administration has broken and to protect our residents, our staff, and the borough as much as possible, but getting the council back on track to recovery and long-term financial and operational sustainability will take a long time and need radical solutions.
“We must balance our books and become a much smaller organisation, which is more efficient and delivers priority services that support our residents, our communities and the borough.”
The council’s cabinet will meet on Wednesday, November 30 to discuss its medium term financial strategy.
In a video, cabinet member for finance Councillor Jason Cummings said: “Croydon Council has today had to issue a new Section 114 notice as a result of legacy issues from Labour bankrupting the borough. This notice has the full support of the mayor and cabinet, this is happening because on our current projections it will be impossible to set a balanced budget next year with the resources we have.”
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