Government minded to send Commissioners into Croydon

Croydon and the Government appear to be at loggerheads over the move after the London borough's mayor complained that "despite all the improvements that have been delivered by the council and its staff, it appears the Government wants to centralise control into the hands of commissioners".

The Government established the panel, led by Tony McArdle, in 2020 in response to a public interest report. Its powers were strengthened in 2023.

In its ninth and final report on the council dated April 2025 but made public on Thursday (13 June), the panel said that "steady progress" has been made in the areas of governance, culture and leadership, and service performance.

"However, the key objective under financial stability – placing the council's finances on sustainable footing – has not been achieved."

The report acknowledged that a "great deal of effort has been put into becoming a properly functioning local authority, with a good deal of success".

It said this progress "reflects creditably" on the staff of the authority but added that: "The challenge for Croydon has always been – and indeed remains – that it must travel further and faster to regain the absolute minimum position of meeting its duty of Best Value, let alone to be able to compare itself with neighbours thereafter."

The panel said: "Notwithstanding the progress made, the council is unable to meet its Best Value Duty as it continues to present an unbalanced financial position.

"The substantial projected overspend in 2024/25 together with an MTFS [Medium Term Financial Strategy] that increasingly relies on EFS [Exceptional Financial Support], makes it inescapable that the council will remain financially unsustainable for the foreseeable future."

The report went on to recommend that the Government continue "a form of intervention" beyond July 2025, when the panel is set to be dissolved.

In his ministerial response, Jim McMahon, Minister of State for Local Government and English Devolution, said: "The council's financial position is deteriorating rapidly and the report documents serious concerns particularly on the council's ability to improve, on some aspects of leadership and on use of resources."

He noted that the council's general fund debt sits at around £1.4 billion, and it relies on the allocation of EFS through in-principle capitalisation directions to balance its budget.

"The dramatic increase in the council's £136m EFS for 2025-26 from £38m granted for 2024-25 is highly concerning," he said.

"The council has received approximately £553m in total EFS since March 2021. This is simply not sustainable."

McMahon said he was satisfied the council was failing to comply with its Best Value Duty and that he was "minded to exercise powers of direction" under section 15(5) and 15(6) of the Local Government Act 1999 to implement an intervention package that ensures the council's compliance with its Best Value Duty.

"I am satisfied that the scale of the financial difficulties facing Croydon, the failure of the council to adequately respond to these difficulties and the assurance required moving forward means that a short and sharp reset, with fast action, is required to shift the dial on the council's recovery", he continued.

He proposed escalating the intervention to a commissioner-led model that would run until July 2027. However, ministers intend that two progress reports from the Commissioners will inform a decision as to whether to step down from a Commissioner model after a year.

Croydon's mayor, Jason Perry, has expressed frustration over the plans.

Responding to the announcement, Perry said: "My top priority has always been to fix the council's finances for our residents. We have done everything possible to achieve this at a local level whilst protecting vital services."

He said the council had raised council tax by 10% in 2023 and made £167m in savings over the last four years with plans to save a further £50m this year.

He also highlighted capital receipts worth £230m, including £130m of asset sales and plans to sell a further £68m assets this year.

The mayor added: "If at any time the Panel or Government felt that there was any action the council should be taking, and was not, they had the power to instruct us. They never did.

"Surely that means we are doing everything possible, and they agree with our actions? We have already made very difficult decisions and in my view the residents of Croydon have felt enough pain.

"Despite all the improvements that have been delivered by the council and its staff, it appears the Government wants to centralise control into the hands of commissioners."

The mayor stated that he is not willing to support any cuts that would decimate local services, nor is he prepared to break his promise to residents of no more council tax rises above the Government cap.

Croydon previously said it disagreed with the findings in the panel's final report and raised concerns with the Government over its content and compliance with statutory guidance.

The council complained about the panel's report in a letter to the Government in May, which claimed the report included "factual errors and misinterpretation".

The London borough also said it only had a few hours to comment on the draft letter, which departed from the panel's previous practice, where the council said: "An opportunity to comment on a draft letter was given, then dialogue ensued, correction of any factual errors and a discussion of perspectives".

Adam Carey