Government takes over management of bankrupt Croydon Council to write off ‘toxic’ debt
Troubled Croydon Council has been taken over by central government, which is trying to write off more than half a billion pounds in debt.
Leveling Up Secretary Michael Gove announced that the borough would be taken into special action as it authorized officers appointed by Whitehall to take on a greater role in the administration of Town Hall.
Tory-led Croydon Council published its third bankruptcy notice in two years in November and earlier this month signed a record 15 per cent tax hike to smooth its finances.
The special measures pave the way for the central government to write off more than £500m in loans that the local authority has accumulated and is unable to repay.
Tony McArdle, who was appointed Chair of the Borough’s Improvement Board two years ago, will be responsible for major financial decisions in Croydon. He was previously hired to lead Northamptonshire Council following the financial collapse in 2018.
Croydon racked up £1.6 billion in ‘toxic’ debt under the previous Labor government.
In local elections last May, the Conservatives won control of City Hall.
The borough’s acting mayor, Jason Perry, said: “Given the £224 million in additional capitalization orders agreed last month and our request for unprecedented debt relief, it is understandable that the Government would want to formalize our current improvement arrangements as a precautionary light of the additional ones historical issues that have been uncovered.
“I welcome the continued focus from Government and the Improvement Board to support our aim of bringing sustainable local government back to Croydon and reducing the £1.6 billion toxic debt inherited from the previous Government.”
Croydon Labor said in a statement: “The granting of new executive powers to government officials is a clear sign that the government is losing confidence in the leadership of the council.”
The news came the same week that Croydon unveiled the art projects it will host as London’s Borough of Culture 2023.
Sadiq Khan confirmed the district would receive a £1.35million grant to “showcase local talent through a diverse and inspiring program of arts and performances”.
https://www.standard.co.uk/news/politics/government-croydon-council-michael-gove-debt-b1068047.html Government takes over management of bankrupt Croydon Council to write off ‘toxic’ debt