Croydon Council £1.5 billion in debt and on the verge of bankruptcy
Author: Aishah Rahman | Thursday 12th November 2020
Croydon Council has gone bust after running up £1.5 billion in debt, according to local MP Chris Philp. The cash-strapped Labour-run borough has imposed emergency spending restrictions under Section 114, stating the council will not be able to balance its budget this year- effectively equivalent to bankruptcy. The notice bans all expenditure at Croydon Council with the exception of statutory services for protecting vulnerable people.
A letter to councillors by finance director Lisa Taylor outlining the serious issues facing the council read: “The Covid-19 crisis and a decade of austerity have had a major impact on our finances”.
“It’s clear the council has also made mistakes, and I am committed to fixing that. We know we cannot do this alone, and we want to work in partnership with everyone with a stake in Croydon’s success.
A document seen by the BBC states “Croydon’s financial pressures are not all related to the pandemic”. It is under a government review amid claims of “irresponsible spending”.