Further historic horrors continue to emerge from Croydon Council’s finances. As everyone knows, the previous Labour administration bankrupted the Borough and left a truly toxic legacy after being voted out of office in the May 2022 elections. Debt stood at £1.6 billion, which is far more than any other London Borough and neighbouring Bromley, which had no debt at all.
The previous Labour administration had wasted over £200m on loss-making property speculator Brick by Brick; spent £30m on a hotel that then went bankrupt; spent over £50m on a shopping centre which then lost value and misspent around £80m on what turned out to be a cosmetic refurbishment of the Fairfield Halls (which still leaks). This was all public money that will have to be paid back. The cost of servicing this debt is around £50m per year, which is a large proportion of the council’s annual budget. It is around four times the cost of collecting our bins each year.
It has now also transpired, as part of an “opening the books” exercise commissioned by Croydon Mayor Jason Perry, that further historic losses had been concealed by the previous Labour administration, including the misallocation of funds for affordable homes. It was also uncovered that they had also exaggerated forecast council tax income by inventing homes that did not exist and also invented extra parking income that did not exist in order to make it appear that the budget balanced.
Mayor Jason Perry has been battling to fix all this, but with the weight of debt servicing and further historic losses emerging it has been very, very difficult indeed.
It is also important that those responsible are held to account. The Council’s Appointments and Disciplinary Committee agreed to publish the “Penn Report” in February this year, which exposed the whole catalogue of wrongdoing. This report and others have now been passed to the Police to investigate the common law criminal offence of Misconduct in Public Office. The new Mayor is also seeking to recover former Chief Executive Jo Negrini’s egregious pay-off, amounting to nearly half a million pounds, that the previous Labour Council Leader agreed to pay using public (i.e. our) money. This sorry saga is not yet over, but it is important that Croydon is put back on the path to financial sustainability.