Croydon council: Ministers send in taskforce as authority teeters on verge of bankruptcy


inisters have sent in a taskforce to oversee Croydon council after an audit found the authority is on the verge of bankruptcy.  

A damning audit report criticised the Labour-run council for years of financial mismanagement and accused it of “collective corporate blindness”.

It also said the borough had a governance culture in which spending decisions were not robustly challenged or scrutinised.

Now Communities Secretary Robert Jenrick has confirmed that Croydon has approached the government for financial help and announced a “rapid review” will be carried out.

Mr Jenrick said: “The public interest report published this week is damming about the dysfunctional governance within Croydon council, who have been entirely irresponsible with their spending and investments.  

“There are serious questions that local leaders have to answer, and we are stepping in to get the situation under control.”

The auditors Grant Thorton said: “There has been collective corporate blindness to both the seriousness of the financial position and the urgency with which actions needed to be taken.”

The council has a £65m black hole in its budget and only £10m of financial reserves.  

The intervention stops short of a full Northamptonshire-style statutory intervention for now. The Tory-run Northamptonshire county council declared itself effectively bankrupt in 2018.

Croydon’s new leader Hamida Ali said: “This report highlights serious issues with how the council has managed its finances in recent years. These problems have deep roots, but I am sorry we got things wrong and I want to reassure our residents, staff and partners that my absolute priority as the council’s newly-elected leader is to put this right. While a decade of austerity and the Covid-19 crisis have had a major impact on our finances they do not excuse the issues this report has laid bare.

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“The council fully accepts the findings and recommendations of this report and the council’s new leadership will take swift and decisive action to stabilise the council’s finances and governance. My new administration is committed to a new culture which puts transparency, accountability and value for money at its heart.”



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