Croydon's Mayor has firmly pledged not to increase council tax by more than 5% next year, despite the government relaxing rules to permit larger hikes for authorities in severe financial difficulty.
A Firm Pledge on Tax Rises
Last week, the government announced it would allow some local councils to raise council tax by more than the standard 5% cap without holding a local referendum. This change is designed for councils grappling with significant financial troubles. However, Croydon's Mayor, Jason Perry, has immediately rejected this option for his borough.
He confirmed to the Local Democracy Reporting Service (LDRS) that his position is clear: he has no plans to go above the existing 5% cap. This commitment comes even as Croydon Council continues to manage a colossal debt of £1.4 billion, with its recovery efforts being overseen by government-appointed commissioners.
The Battle for Fairer Funding
Mayor Perry's statement shifts the focus away from local tax increases and towards securing a better deal from central government. He welcomed the government's latest update on its Fair Funding 2.0 model, which he has previously called a "vital opportunity to correct years of underfunding" in Croydon.
This sentiment is shared across the political aisle. Both the Conservative Mayor and his main rival in next year's mayoral election, Labour's Rowenna Davis, have launched campaigns demanding a fix to what they describe as an "outdated" funding settlement. They argue this long-standing issue has severely constrained investment in local public services.
Under the proposed reforms, the government plans to scrap funding formulas that have historically disadvantaged deprived areas. It has also pledged a £5 billion boost over three years to ensure fairer access to local services, with a final decision expected in December.
Political Claims and Counter-Claims
The fight for fair funding has sparked a political debate over who is responsible for the progress. Councillor Rowenna Davis claimed the government's tweak to the formula was a "huge win for our campaign." She criticised Mayor Perry, stating he had "sat on the council for 30 years and has failed to get this far."
Mayor Perry swiftly countered these claims, pointing out that he was part of a Conservative council that launched a Fair Funding campaign as far back as 2006. He emphasised his cross-party work with other London councils to lobby successive governments. He also noted that the government's consultation had closed months before Labour's petition drive began, suggesting the wheels of change were already in motion.
The political stakes were further highlighted by Steve Reed, the Secretary of State for Housing, Communities and Local Government and MP for Streatham and Croydon North, who accused the previous Conservative government of "14 years underfunding Croydon."
This commitment to a lower tax rise stands in contrast to recent history, where Croydon raised council tax by 15% in 2023/24 after receiving special government permission. This year's increase, however, returned to the standard 5% cap.
The broader local government sector has responded cautiously to the funding review. Councillor Pete Marland, Chair of the Local Government Association's Resources Committee, acknowledged positive measures like multi-year settlements but warned that council finances remain under severe pressure from rising costs in social care and temporary accommodation.
