Croydon forced to issue Section 114 as it runs out of cash


The London borough of Croydon can no longer balance its budget and has issued a Section 114 notice, imposing emergency spending restrictions with immediate effect.

The order bans all new expenditure, with the exception of safeguarding vulnerable people and statutory services.

Finance director at the council Lisa Taylor has outlined a potential budget shortfall in the current financial year of around £66m.

While there are statutory responsibilities attached to highways duties, spending in this area is often cut to help pay for adult and children's care when times are tough.

In 2018, FM Conway won a £130m, seven-year highways contract and had been hoping to work closely with Croydon Council to support its £5.25bn regeneration programme covering public realm projects.

Croydon said it is 'in talks with the government about the financial support necessary to balance the budget and transform the council'.

Cllr Hamida Ali, leader of the council, said: '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.

'We know that we cannot do this alone, and we want to work in partnership with everyone with a stake in Croydon's success. That includes seeking financial support from the government, and today's section 114 notice is a part of making that case.

'While we continue to work hard to find savings, we must focus our spending on essential services and protecting our vulnerable residents.'

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