As a consequence of the Labour Council bankrupting Croydon due to their financial incompetence, the Council is being forced to borrow £150 million over the next 3 years just to fill the gap in their revenue expenditure. Normally one would expect the Council to borrow money to invest in and improve our public services; but in this case what the Council is doing to simply to plug the black hole in the budget that Labour has left Croydon.
Of the £150 million debt, £70 million will be borrowed in the current financial year (2020-21) to plug the budget deficit. The remaining £80m is needed to balance the next three years budgets as the necessary cuts have not yet been worked out. As yet the government has not agreed to the full capitalisation request.
The £150 million in borrowing of course will come at a huge cost to Croydon residents. The interest repayments alone on this borrowing will come to approximately £58 million over a 20-year period. Overall, the Council will have to pay around £11 million a year in debt repayments over the foreseeable future. This is money that could have instead gone to improving our much-loved public services.
Next year, the Council is planning to make swingeing cuts to our services, all of which would have been unnecessary had Labour managed the Council’s finances better. Had the Council not needed to pay £11 million in annual debt repayment, then the following cuts to public services could have been saved:
- Keeping 5 branch libraries open -- £500,000 per annum
- New library building in South Norwood -- £900,000
- Keeping Purley Pool open -- £130,000 per annum
- Refurbish Purley Pool -- £500,000
- Not cutting planned maintenance to our parks: £450,000 per annum
- Keeping the free bulky waste collection -- £320,000 per annum
- Not closing 2 Recycling Centres as in being planned -- £200,000 per annum
- Not increasing parking charges -- £3 million per annum
Adding all these planned service cuts or additional charges comes to £6 million, which would have still left the Council an additional £5 million to invest in public services. Unfortunately, the true cost of Labour’s financial incompetence and mismanagement is now becoming clear to Croydon residents and we lose our much-loved services.