Croydon (Parliament Politics Magazine) – Labour MP Sarah Jones Davis has called on Minister Steve Reed to ensure fair funding for Croydon, highlighting ongoing financial challenges in the borough.
With Chancellor Rachel Reeves’ Budget only a few weeks away and the yearly settlement for local government coming shortly before Christmas, this uncommon, nearly unprecedented, shared cause from Croydon’s Labour and Tory parties is timely.
The leader of one of the larger political groups said:
“For far too long Croydon has been short-changed by an outdated system that simply didn’t recognise the pressures we face.”
And a senior figure from the other half of Croydon’s political duopoly said:
“We need fair funding that reflects the real needs of our residents. For too long our schools, social care and local services have been stretched .”
Jason Perry, Croydon’s mayor since 2022, is quoted in the first quote above. He has failed to “fix the finances” as he promised, and local elections in six months will decide whether he keeps his £84,000 council income.
Since the Labour administration sent in Commissioners to address “leadership issues” and “runaway” finances in the summer, Perry has been left a lame duck mayor. Earlier this year, they gave Perry’s borough a record £136 million emergency bailout.
The second quotation is from Rowenna Davis, Labour’s mayoral candidate in the 2026 local elections. Davis finds it most difficult to allay locals’ serious concerns about her party’s ability to function both in Croydon and, more recently, at Westminster under Prime Minister Sir Keir Starmer.
Alongside their messaging, Perry and Davis included petitions that granted them permission to exploit the precious data in their upcoming campaigns and names and addresses through blatant data-scraping efforts before the May elections.
Additionally, Steve Reed, the Secretary of State for local government and the MP for Streatham (and Croydon North if you ask him), is the recipient of both Perry and Davis’s messages calling for more equitable financing for Croydon.
Additionally, Steve Reed, the Secretary of State for local government and the MP for Streatham (and Croydon North if you ask him), is the recipient of both Perry and Davis’s messages calling for more equitable financing for Croydon.
Reed inherited a public consultation over the local government funding formula when he was appointed to the top position at the Ministry for Housing, Communities, and Local Government in the summer.
They promised “streamlined funding and multi-year settlements… in drive for council efficiency and improved public services” and stated they would create new formulae “to target money to places most in need, replacing decade-old data and outdated funding system.”
A month before Perry and Davis began distributing their petitions, MHCLG had completed receiving representations for the eight-week consultation.
However, the government did publish an updated Index of Multiple Deprivation last week, which offers information on living circumstances nationwide.
The statistics supported what the majority of Croydon residents already knew, which is that the borough has stark differences in living conditions and contains some of the most impoverished regions in the nation. Statistics show that 4% of Croydon’s neighborhoods are categorized as “highly deprived.”
Davis bases her argument for “ending the postcode lottery in public services” on the discrepancy between Croydon’s budget and the central government grants that other nearby London councils receive.
Based on funding allocations from December last year, Croydon receives £4,650 for every resident. Lambeth, meanwhile, gets £5,077 per person. And just on the other side of a borough boundary, Southwark council receives £5,378 for every resident.
“Croydon deserves justice. We need fair funding that reflects the real needs of our residents. For too long our schools, social care and local services have been stretched whilst our better-funded neighbours get disproportionately more per head,”
Davis said.
However, Croydon’s Tory Mayor had asked Michael Gove, the Tory Minister at the time, for approval of the unique council tax hike that the borough’s citizens were being subjected to. Fairer funding from the Conservative government was not mentioned at the time by Perry or the Tories.
Since taking power in 2022, Perry has raised Council Tax by 33% by April of next year.
In fact, the MHCLG may have been thinking about Tory-run Croydon when it announced its funding consultation in June, stating in a ministerial statement that “for too long, many residents have seen Council Tax hikes despite declining local services.”
Perry’s plea also appears to be delusional.
“We’ve stabilised the council’s finances,”
wrote the Mayor who needed a £136million bail-out just a few months ago, and who last month was issued with a statutory warning by the council’s auditors because “arrangements to achieve financial sustainability have deteriorated”.
The out-dated system and under-funding of Croydon has come after 14 years of Tory-imposed austerity. And such austerity is something which Starmer and Reeves have shown no great urgency in wanting to bring to an end.
“Government must… deliver a settlement that truly reflects need and deprivation,”
Perry wrote in his mis-addressed plea, having spent two years in power with a Conservative government that failed Croydon and, in fairness, failed the Tory Mayor, too.
Davis, a councillor for the Waddon ward, may have more success pursuing more equitable funding and ways to lessen the council’s £1.4 billion debt, half of which was accumulated by Perry and his associates during their eight years in office until 2014. Davis is well-connected to both the ruling National Executive Committee of Labour and friends in No. 10 and No. 11 Downing Street.
“We have huge levels of deprivation, local services are struggling and we desperately need the fair funding we deserve,”
Davis said.
“The Conservatives were in government for 14 years and never got to grips with this injustice. I’m pleased that the Labour government is finally looking into this – and I want them to hear Croydon’s position loud and clear.”
What funding formula changes Labour proposes for Croydon?
Streamlining the privation measure used in backing allocation to more reflect true local requirements by including housing costs, which are presently barred but veritably poignant in London boroughs like Croydon.
Adjusting allocations to regard for the high cost of service provision in thick civic areas, icing councils with more complex social and casing requirements admit acceptable finances. adding overall entitlement backing to help boroughs from counting heavily on council duty rises and exigency borrowing.
These proposed changes aim to close the backing gap with further rich neighboring boroughs and give Croydon with sustainable fiscal stability to support essential services and housing enterprises.