Conservative, Jason Perry has penned an open letter to the Secretary of State for Housing, Angela Rayner.

He’s outlined the authority’s £1.6 billion debt burden.

Mayor Perry says he inherited this from the former Labour council and it led to the authority’s financial collapse in 2020.

He says this burden continues to cost the Council £62million a year to service, money which he says should be spent on residents instead.

Mayor Perry is requesting a meeting with the Minister, at the earliest possible opportunity, to discuss a way forward.

Here is Mayor Perry’s letter in full.

Dear Secretary of State,

Congratulations on your recent election and appointment to Cabinet.

I am writing to you at the earliest opportunity as the Secretary of State with
responsibility for local government. I am aware that in your early career you worked
directly for a local authority, and more recently have worked closely with the Local
Government Association on the work they do to support councils. I am pleased that
someone who understands local government has been appointed to this role.

I appreciate that there are a range of issues to face as you take on this important
office of state. Paramount amongst these will, I am sure, be the pressing state of
local government finances. Whilst there are a number of councils in significant
financial distress, each are different, and I am keen that you are informed about
Croydon’s unique position.

You will be aware that Croydon previously saw a period of significant financial and
governance mismanagement, which led to the Council’s well publicised collapse in
2020. When I was elected as Executive Mayor, in May 2022, my immediate priority
was to fully understand the state of the Council’s finances, by embarking on a large
scale ‘Opening the Books’ exercise. The historic financial problems that were
uncovered have left the Council with issues that are, despite our best efforts,
insurmountable without a different approach to extraordinary Government support.
We have stabilised Croydon’s financial position and are making significant progress
on my aim to get Croydon back on track. We are one of only three London boroughs
to deliver a balanced budget this year, albeit with a Capitalisation Direction in
place. We have also embarked on a ground-breaking transformation programme,
‘Future Croydon’, which will completely overhaul the way in which we deliver better
outcomes for our residents and make us one of the most effective and efficient
councils in the country.

Despite this, Croydon Council still has a £1.6bn debt burden, which costs some
£62m per year to service. Whilst we have put in place a range of measures to
stabilise our position, including selling our assets and transforming our service
delivery, this represents 17% of the Council’s core spending power. The scale of this
unprecedented debt means that we are simply unable to deliver a wholly balanced
budget, without that different approach to extraordinary financial support from the
Government.

To date, Capitalisation Directions totalling £379m, plus £38m for 2024/25, have been
approved in principle by your predecessors in Government. However, this cannot
continue in the longer term. We want to work with you to secure our ongoing
financial sustainability, in order to deliver for our residents and ensure that we can, in
future, balance our budgets without recourse to Government.

You will be aware that your predecessor put in place a statutory Improvement and
Assurance Panel, and you will note that his letters on our performance have been
largely positive and recognise the progress we have made to date. The Panel
supports our analysis of the issues at hand and our approach to tackling them.
I recognise that there is much to consider, and you will not want to reward historic
failure. We know that there is not a one size fits all solution to the problems that local
government face. However, I believe that Croydon now offers an example of how a
local authority can rebuild after a financial and governance collapse, and can offer a
way forward. Whilst we are working hard to fix our problems, we do need a new
approach from the Government to restore sustainable local government in Croydon.

I would welcome a meeting with you, at your earliest opportunity, to discuss these
matters further.

Yours sincerely
Mayor Jason Perry
Executive Mayor of Croydon