Croydon Council’s budget proposals for the financial year 2023-24, which include an exceptionally large council tax increase of 15 per cent, were rejected by a majority of the borough’s councillors last night. What happens next is clear enough in theory, but could be rather untidy in practice.
The situation already shows the complications that can arise when a local authority has a Directly-Elected Mayor (DEM) from one political party and a majority of councillors from different ones.
The budget proposals of Jason Perry, the borough’s Conservative Mayor, were turned down by a simple majority, with the Town Hall’s two Green Party councillors and one Liberal Democrat joining Labour’s 34 to outnumber the Tories 37-34 (there are 70 Croydon councillors in all, including 33 Conservatives, and the Tory Mayor also gets a vote).
This means Perry’s budget must be considered again by the full council next week. His plans as they stand can only be changed if a two-thirds majority votes for specific amendments to it. That would mean 47 councillors agreeing to the same change (or changes) to the current proposals, entailing at least ten Tory councillors switching sides. This is highly unlikely to happen.
At the same time, the plans as they stand can still be approved by a simple majority, as they could have been last night. But for that to happen will require two of the councillors who voted against Perry’s plans last night changing sides to create a 36-35 vote in favour of them. That outcome doesn’t seem to be on the cards either.
Therefore, for this apparent deadlock to be broken, something has to give – the law requires that a balanced budget is set by 11 March. Here’s what the council has to say about the matter:
“The Executive Mayor will now consider the feedback from council ahead of the next Full Council meeting on 8 March, where he will set out his response and, if necessary, revisions for consideration at that meeting.”
The council also confirms that:
“At that meeting they [council members] can adopt the Executive Mayor’s proposals by a simple majority. If councillors wish to amend the Executive Mayor’s proposals further, this will require a two thirds majority to approve.”
Essentially, Mayor Perry has got to come up with something different that will persuade at least two of the 37 councillors who voted against him last night to help him and his 33 fellow Tories get a budget approved.
That effectively means something that will turn the pair of Greens – getting only the sole Lib Dem onside would not be enough – or, much more likely, can command the support of the 34-strong Labour group. Its leader Stuart King seems to have indicated he would be agreeable to a smaller council tax rise, calling on Perry to “bring back a budget that doesn’t punish residents in this way”. His bargaining position looks strong, but in the context of the law demanding that a deal must be done.
Croydon received special dispensation from the government to propose its 15 per cent council tax increase – three times higher than the standard hike permitted. This emerged from a wider negotiation about its financial difficulties, which has also so far resulted in a provisional offer of £224 million in “exceptional financial support” (called capitalisation directions) to be served up in portions over the next four years starting with £63 million for 2023-24. Croydon has asked for £540 million of debt to be simply written off.
As Perry works out what to do next, will Michael Gove’s department come to his aid in some way? What concessions will King and the Labour group be looking for? What if no agreement can be reached? At what late hour might next Wednesday’s meeting end?
On London strives to provide more of the kind of journalism the capital city needs. Become a supporter for just £5 a month. You will even get things for your money. Learn more here.