Croydon (Parliament Politics Magazine) – A long-awaited review of council funding across England could finally bring financial relief to Croydon, one of the country’s most debt-stricken local authorities.
According to a report by the nation’s top independent economics research institute, Croydon may actually be one of the “winners” of the next government review of local authority spending.
After 15 years of Westminster-imposed “austerity” policies, with ever-increasing levels of Council Tax and several councils, including Croydon, going bankrupt, the Institute for Fiscal Studies report, which was released today, probably doesn’t tell us anything new about local authority funding.
According to the IFS study, English authorities require billions of pounds more in funding to keep up with the growing demand, especially for housing and social services.
The Labour government’s review is unlikely to provide additional funding for all councils, but it is likely to reallocate some of the available funds to the most critical areas under Angela Rayner’s leadership as Secretary of State at the Ministry of Housing, Communities, and Local Government.
Which may be where Croydon, which is struggling financially, finally receives some assistance.
The IFS report says,
“From 2026–2027, there will be a new system for allocating funding between councils, which will take account of new official assessments of councils’ spending needs and their relative abilities to raise revenues themselves via Council Tax.
Changes will be phased in over three years to ease the transition, with funding floors in place to limit losses for those receiving less funding under the new system than currently.
These reforms are welcome: for arguably 20 years, England has lacked a rational system for allocating funding between councils.”
Over the years, Inside Croydon has often brought attention to the disparities in council funding.
Our blogger, Andrew Fisher, wrote twelve months ago: “Croydon Council received £239.25 per person in government funds in 2022–2023. Lambeth, which is nearby, receives £481.73 per household.
The Inner London Standard and BBC Inner London’s coverage of the IFS study concentrated on how inner London municipalities including Lambeth, Southwark, and Wandsworth will have to raise council taxes by the maximum permitted amount. However, except from sporadic acts of kindness from Wandsworth Town Hall, it is hard to remember a time when such was not the case.
Urban communities outside the capital, such as Nottingham, Wolverhampton, and Slough, will also receive higher settlements from central government as a result of the inevitable robbery of inner London Peters to pay outer London Pauls.
The government claims that because council financing is no longer in line with local service demand, the change is required.
There will also be a redistribution of the business rates revenue that municipalities have been permitted to retain since 2013.
According to the IFS, the proposed reforms are expected to redistribute approximately £2.1 billion in government funding annually, with 161 authorities gaining and 186 authorities losing out.
Until the plans are finalized later this year, it will be impossible to predict exactly what the changes will mean for each location.
What specific measures is Croydon implementing to modernize services?
Croydon is developing an integrated technology platform to streamline both internal processes and resident-facing services.
This includes optimizing and automating core systems, harnessing new digital capabilities (such as automation and user-centric online services), and using data to provide a single, real-time view of the customer for more personalized services.
The council’s “My Account” system enables residents to access over 100 services online 24/7, with digital engagement tools reducing face-to-face demand and increasing communication. Innovations like the “Don’t Mess with Croydon” mobile app allow residents to report issues directly. Improvements to the council website and customer platforms are ongoing, with a focus on usability and accessibility for a wide range of users.