Local Government Finance: Croydon

Opened the debate

The Member of Parliament raised concerns about the section 114 legal notice issued to Croydon Council, which halted all non-statutory expenditure. This was the first such notice in London in two decades. He highlighted that this situation is a sign of financial distress and emphasised the need for robust governance and effective oversight. Simmonds provided context on the impact of austerity measures and the role of capital borrowing in exacerbating Croydon's financial problems, while also drawing parallels with his experience as a councillor in Hillingdon. He called for assurance from the government that other London boroughs will not face similar issues due to mismanagement.

Government Response

Minister Kelly Tolhurst responded by acknowledging the debate on the important issue of local government finance, particularly focusing on Croydon Council. She highlighted the support provided to councils through the spending review and detailed additional funding allocated specifically to Croydon, including over £49 million in various grants during the pandemic. The minister outlined the section 114 notices issued by Croydon's financial director due to budgetary pressures and emphasised that the council was independent of central government. She also mentioned an independent review team appointed to assess the situation and reported findings to the Secretary of State, who will respond accordingly. Tolhurst assured residents that services necessary for safeguarding vulnerable people would continue and that the Government would take a keen interest in Croydon's steps towards financial sustainability.