Cash-strapped Croydon asks government for a loan

Croydon Council has formally asked the government for a bailout as it tries to get its finances back under control.

The London borough has formally submitted a request to ministers for a capitalisation direction to support the borough’s plans to become more financially sustainable.

The leader of the council, Cllr Hamida Ali, has requested the loan from the Ministry for Housing, Communities and Local Government (MHCLG) so Croydon can balance its budget by the end of this financial year and cover future deficits.

The council has requested a capitalisation direction of £150m – £70m of this is to cover the current financial year deficit, and an additional £80m to cover the period from April 2021 to March 2024.

The London borough published the details of its financial recovery plan last month and warned it could take years to put the borough on a sustainable footing again.

The new plans will mean Croydon will stop delivering some services and reduce the number of staff it has in order to balance the books.

Earlier last month, it issued a section 114 notice, which halted all new non-essential spending at the local authority.

‘We are clear about the scale of our serious financial situation, but we also know what improvements we need to make to put things right in the months and years to come,’ said Cllr Ali.

‘We’re asking MHCLG for a loan that will support our plans to live within our means while we continue vital services, particularly supporting and protecting vulnerable residents, keeping people safe and reducing inequality.’

Photo Credit – Pixabay