A council in south London has announced emergency spending controls that will take place with “immediate effect”.
Labour-run Croydon Council issued Section 114 on Wednesday. This effectively bans all new expenditure, barring services to extremely vulnerable people.
It is only the second council to face such measures in ten years. An emergency budget is currently being drawn up.
One of the reasons given to councillors for this decision is a potential budget shortfall in the current financial year of around £66 million.
Hamida Ali, Labour leader of the council, said: “We need to be honest about the fact that, for a number of reasons, the council is on track to spend more than we have.
“The Covid-19 crisis and a decade of austerity have had a major impact on our finances, but it’s clear the council has also made mistakes and I am committed to fixing that.”
The council has already introduced a number of savings programmes. These are to help tackle the financial pressure they have been under over the past few months.
Ms Ali became leader of Croydon Council three weeks ago. She continued: “We know that we cannot do this alone and we want to work in partnership with everyone with a stake in Croydon’s success.
“We’re not going to fix these problems overnight”
“While we continue to work hard to find savings, we must focus our spending on essential services and protecting our vulnerable residents.
“We’re not going to fix these problems overnight and there will be difficult decisions ahead but I want to reassure local people that the council will still be here to support you
“My priority is rebuilding a financially sustainable organisation, which provides the value for money and high-quality services that residents deserve.”
A recent survey of 36 local authorities by the County Councils Network said one in five (22%) are “confident” they can deliver a balanced budget next year, without “dramatic” reductions to services.
The survey found that, without financial help, only one council will be able to invest in adult social care over the next two years.
Two-thirds of respondents said they would need additional funding in order to properly support the economic recovery from the pandemic. 65% reported there would be greater demand on the NHS.
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Standfirst
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HeadlineCroydon Council bans new spending due to ‘severe ongoing financial challenges’
Short HeadlineSpending ban in Croydon Council
StandfirstThe ban will mean that no new spending will be permitted unless they are for people in extreme need.
A council in south London has announced emergency spending controls that will take place with “immediate effect”.
Labour-run Croydon Council issued Section 114 on Wednesday. This effectively bans all new expenditure, barring services to extremely vulnerable people.
It is only the second council to face such measures in ten years. An emergency budget is currently being drawn up.
One of the reasons given to councillors for this decision is a potential budget shortfall in the current financial year of around £66 million.
Hamida Ali, Labour leader of the council, said: “We need to be honest about the fact that, for a number of reasons, the council is on track to spend more than we have.
“The Covid-19 crisis and a decade of austerity have had a major impact on our finances, but it’s clear the council has also made mistakes and I am committed to fixing that.”
The council has already introduced a number of savings programmes. These are to help tackle the financial pressure they have been under over the past few months.
Ms Ali became leader of Croydon Council three weeks ago. She continued: “We know that we cannot do this alone and we want to work in partnership with everyone with a stake in Croydon’s success.
“We’re not going to fix these problems overnight”
“While we continue to work hard to find savings, we must focus our spending on essential services and protecting our vulnerable residents.
“We’re not going to fix these problems overnight and there will be difficult decisions ahead but I want to reassure local people that the council will still be here to support you
“My priority is rebuilding a financially sustainable organisation, which provides the value for money and high-quality services that residents deserve.”
A recent survey of 36 local authorities by the County Councils Network said one in five (22%) are “confident” they can deliver a balanced budget next year, without “dramatic” reductions to services.
The survey found that, without financial help, only one council will be able to invest in adult social care over the next two years.
Two-thirds of respondents said they would need additional funding in order to properly support the economic recovery from the pandemic. 65% reported there would be greater demand on the NHS.
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