Cash-strapped Croydon Council confirms 15% council tax rise after bankruptcy
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Council tax bills will rise sharply in Croydon after the council approved a rise of 15% to help fix its troubled finances.
The South London council asked permission to bring in the rise without a referendum after declaring itself bankrupt again last November.
The Executive Mayor of Croydon, Jason Perry, said it wasn't a budget he wanted to set, but "it is a budget that will help us to protect vital services for our residents," he added.
Current laws mean councils can only raise council tax by up to 5% a year, anything higher usually requires a referendum. The "exceptional circumstances" in Croydon meant the government simply agreed to the request.
Croydon first declared itself bankrupt in 2020 and was given a central government bailout loan. The council needs to pay £47m each year to meet the £1.6bn debt.
"We have demonstrated that we will not shy away from taking tough decisions locally to do the right thing in the long term for our borough, and in our ongoing negotiations with the government I am pushing hard for the best possible deal for our residents," Jason Perry, Executive Mayor of Croydon said. "Their confirmation of our capitalisation request for this year is welcome and we look forward to hearing from them on our additional requests including a write off of some of Croydon’s debt," he added.
Last year Croydon’s chief financial officer warned that the council was unsustainable and would not be able to continue without a new model of support from government.
The council is negotiating with the government for further support to address its serious financial problems including writing off the £1.6bn toxic debt that is hampering the council’s recovery and ability to function properly.
The rise will cost the average household in Croydon an extra £235 each year.
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