The Scrutiny and Overview Committee met to review the Executive Mayor's annual update and the Period 10 Financial Performance Report. Key discussions included the council's financial stability, regeneration plans, housing services, and the dedicated schools grant.

Executive Mayor's Annual Update to Scrutiny

Executive Mayor Jason Perry presented his annual update, highlighting achievements from his first term and outlining priorities for the next four years. He emphasised the progress made in stabilising the council's finances and governance, improving services such as Children's Services and Adult Social Care, and delivering visible improvements in neighbourhoods through initiatives like blitz cleans and investment in parks. The Mayor also detailed his administration's priorities for the next four years, focusing on raising standards, accelerating regeneration, and ensuring tangible improvements for residents. These priorities are structured around seven key areas: A Fair Deal for Residents, A Cleaner, Safer Croydon, A Town Centre that is Busy, Confident and Thriving, Stronger Local High Streets, Better Roads and Journeys, Homes People Can Be Proud Of, and Supporting Families, Young People and Adults. The First 100 Days Programme was also outlined, focusing on immediate actions such as a strengthened Zero Tolerance campaign against environmental crime and antisocial behaviour, the reintroduction of rolling rubbish collections, and investment in parks and playgrounds.

Discussions around the Mayor's update covered several key areas:

• Financial Stability and Debt Burden: Councillor Michael Neal, Vice-Chair of the Committee, questioned the Mayor on future ambitions for financial stability, particularly concerning capitalisation borrowing. Mayor Perry acknowledged the council's difficult financial position, inherited in 2022, and detailed efforts to tackle legacy issues and reduce reliance on exceptional financial support. He stressed the significant debt burden and ongoing conversations with government and commissioners to find a long-term solution. Councillor Ria Patel inquired about the specific work undertaken with the government to resolve Croydon's historic debt burden, to which the Mayor responded that conversations have been ongoing since the start of his previous term, with a focus on the council putting its own house in order before seeking external assistance.
• Value for Money and Service Delivery: Councillor Patel also raised concerns about how challenging decisions would be communicated and monitored, given the council's financial situation. Mayor Perry assured that consultation would be undertaken and that the focus remained on outcomes, citing the example of library closures leading to improved overall opening hours and usage. He also highlighted the success of the youth engagement team and the shift towards doing things differently rather than simply making cuts.
• Housing Services: Councillor Vicky Newton AMB asked how tenant engagement would be maintained to build trust, especially during times of financial pressure. Mayor Perry emphasised the significant focus on housing over the past four years, noting improvements in housing services and the development of the Residents' Charter. He acknowledged that while progress had been made, work remained to be done, and highlighted hardship funds available for tenants facing difficulties.
• Raising Standards and Public Safety: Councillor Jack Barwell questioned the role of measures like live facial recognition in reducing crime. Mayor Perry expressed strong support for live facial recognition, citing its success in securing arrests and contributing to crime reduction. He also highlighted the work of Park Guard officers and the positive impact of partnership working with the police and voluntary sector in improving public safety and reducing antisocial behaviour.
• Regeneration and District Centres: Councillor Ben Taylor inquired about the success of targeted investments in district centres and the KPIs that would be used to measure their vibrancy and economic success. Mayor Perry acknowledged the need for clear KPIs and mentioned that data on parking, vacancy rates, and business rate support would be used. He also discussed the council's efforts to map landlords and promote vacant units to support local businesses.

2025-2026 Period 10 Financial Performance Report

The Committee reviewed the Period 10 Financial Performance Report, which provided an update on the council's budget position as at the end of January 2026. Councillor Jason Cummings, Cabinet Member for Finance, presented the report, highlighting a forecast underspend of £27.3 million for the General Fund revenue budget, an improvement of £1.1 million since Period 9. This underspend was attributed to efficiencies across all directorates and the achievement of the £27.3 million Stabilisation Plan target.

Key points from the financial report and subsequent discussion included:

• General Fund Revenue Budget: The report indicated an overall forecast underspend of £27.3 million, which would reduce the need for capitalisation directions from £136 million to £108.7 million. All service directorates were tasked with reducing net expenditure below their budgets to achieve this. Councillor Michael Neal questioned how internal spending controls, such as the Oracle system and recruitment panels, had contributed to favourable movements in directorates. Alistair Bannin, Director of Finance, explained how these controls provided greater visibility and rigor, leading to savings through managing vacancies. The report also noted a £2 million adverse movement in corporate items relating to IFRS 16 leases, which increased Minimum Revenue Provision (MRP) costs but was not a loss of funds.
• Dedicated Schools Grant (DSG): An adverse movement was noted in the DSG, with an overspend in the high-needs block increasing to £33.5 million. Councillor Jack Barwell sought reassurance on how this funding remained ring-fenced and how the needs of children and families were being met. Councillor Cummings explained that the DSG is inherently ring-fenced as all provision comes from it. He assured that Croydon was proactive in providing support and that the council would continue to fulfil its statutory responsibilities. The report mentioned a forthcoming high-need stability grant from the Department for Education, expected to cover 90% of the accumulated debt, leaving an estimated £10 million problem.
• Low Traffic Neighbourhood (LTN) Fine Reimbursements: The report detailed the financial implications of the High Court ruling on LTNs, requiring the repayment of an estimated £3.5 million in fines. This would be funded through the business risk reserve, which was forecast to retain approximately £5 million after the deduction. Councillor Mark Johnson inquired about the use of this reserve and the replacement of funds. Councillor Cummings explained that the business risk reserve was also used for transformation work, and that while the LTN refunds would reduce the reserve, it would still hold a significant balance. The council was also facing an ongoing annual problem of approximately £3 million due to the removal of the LTN schemes, which would be addressed through income generation and underspending across the council.
• Staffing and Vacancies: Councillor Ria Patel raised concerns about savings being made through unfilled vacancies, questioning whether this masked a lack of delivery in transformation savings. Councillor Cummings explained that vacancies were monitored and that some were held strategically due to reorganisation or future deletion of posts, rather than to meet financial targets. The report also noted improvements in sickness recording and the introduction of a sickness specialist to support areas with long-term sickness.
• Stabilisation Plan: The report indicated that the Stabilisation Plan was nearing completion, with £21.6 million (86.1%) of the £25.1 million savings target forecast to be achieved. Some actions, such as the Accelerate Target Operating Model programme and maximising floor occupancy in Bernard Weatherill House, were rated as 'Red', indicating they had not been evidenced to date. The report explained that the Accelerate Target Operating Model programme would be reabsorbed into the wider transformation programme, and that progress on BWH occupancy was ongoing. The Precious House project, previously delayed due to Ofsted registration, was now occupied, with learnings incorporated into future forecasting.

The Committee noted the positive financial performance and the progress made in stabilising the council's finances, while also acknowledging the ongoing challenges, particularly concerning the high-needs block and the need for continued focus on long-term financial sustainability. Actions were agreed to review website information accessibility, provide parking data for future analysis, and to invite the commissioners to a future meeting to discuss the Mayor's business plan. The Committee also agreed to note the draft scrutiny work programme for 2026-27.