A Labour-run London council has issued a notice confirming it’s facing severe continued financial challenges and unable to fill a staggering £66 million black hole in its budget.
Croydon council, in South London, has issued the section 114 notice proclaiming they can’t fill the huge budget gap due to risky property investments and lax financial controls.
All non-essential spending has now been frozen for 21 days as the council prepares for crisis cuts to stabilise its finances and Labour leader, Hamida Ali, said that tough decisions lay ahead, but auditors have blamed the council of collective corporate blindness.
A representative for the Ministry of Housing, Communities and Local Government said that councils are responsible for balancing their budgets and it’s only right that Croydon council takes the necessary decision to handle its finances.
The spokesperson said that they were aware of the serious problems around the council’ governance and risk management and that the recent public interest report was damning about the governance within Croydon council, which had been irresponsible with their spending and investments.
And that was why they’d started a rapid non-statutory examination into the council to get the problem under control.
The representative said the council had chosen to issue a section 114 notice and would consider the conclusions of the review which would conclude later this month.
Ms Ali, who only became Croydon’s council leader three weeks ago, also issued a statement acknowledging that the council was on track to spend more than they had.
She said that she became the leader of Croydon three weeks ago, that she pledged a new approach, one which tackles the problems the council is now facing head-on, and she said that they needed to be honest about the fact, that for several reasons, the council is on track to spend more then they have.
She said that the COVID 19 crisis and a decade of austerity have had a significant impact on their finances, but it was evident that the council had also made mistakes and that she was dedicated to correcting that.
And that while they continue to work hard to find savings, they must concentrate on spending on essential services and protecting their vulnerable residents.
She said that they weren’t going to resolve these issues overnight and that there would be tough decisions ahead, but that she wanted to reassure local people that the council would still be there to support them.
However, it seems no shock that Labour-run Croydon can’t add up or do the math and I wonder if they’re still stacking up their pension contributions and wages and expenses, charging the public a little extra because they’re having to work from the comfort of their own homes.
Generally, the only time you see councillors is when a photo opportunity or a freebie is going. Perhaps now they can begin their cuts by getting rid of directors, executives and managers, and if they’re not willing to do that, then we should have very little compassion for them.
The problem is, they’re squandering taxpayer money and that’s why we have so much deprivation and it’s absurd and unsettling and they should quit paying themselves such lofty salaries for their worth, when they should be spending money on their communities, not themselves.
Well, at least London will be saving a few million New Year’s Eve because they cancelled the firework display, and an independent auditor should be appointed to find out where all the money has been spent.