The Croydon Council met on Wednesday, 6 March 2024, to discuss and vote on the Council's Budget for 2024/25 and the Scheme of Members' Allowances. The Council ultimately rejected the Executive Mayor's proposed budget by a vote of 34 to 35, with 32 abstentions, and deferred the decision on Members' Allowances to a later meeting.

The Council's Budget 2024/25

The meeting was convened specifically to set the Council's budget for the upcoming financial year, as the executive's proposed budget had not been agreed at the previous meeting on 28 February 2024. The Council considered the Executive Mayor's proposed budget, which included a 2.99% increase in the Croydon element of Council Tax and a 2% increase for the adult social care precept levy, resulting in an overall Council Tax increase of 5.69% for a Band D property.

During the debate, two amendments were put forward: one by the Labour Group and another by the Green Group.

The Labour Group's amendment proposed generating £220,000 in savings by reducing or deleting Special Responsibility Allowances (SRAs) for certain political appointments not deemed responsible for executive decision-making or scrutiny. These savings were intended to be reinvested in frontline services, with suggested allocations including reinstating a Housing Safeguarding Officer, funding targeted school support for vulnerable young people, increasing Independent Domestic Violence Advocates, funding a preventative course on healthy relationships, reinstating a Senior Affordable Housing Enabling Officer, recruiting an Environmental Enforcement Officer, strengthening policy oversight, and making additional debt repayments.

The Green Group's amendment proposed a 50% cut to the Special Responsibility Allowances (SRAs) for the administration and shadow cabinet, aiming to generate £161,000 to support frontline services. They also proposed creating new posts for a Neighbourhood Safety Officer and an Environmental Enforcement Officer, commissioning violence prevention services, funding a trial of a pop-up mobile household recycling initiative, investing in bus shelters with green roofs, supporting community food growing projects, applying for active travel infrastructure funding, introducing carbon literacy training for officers, and conducting a review and needs assessment for care leavers.

Following extensive debate, the Council voted on the Labour Group's amendment, which was rejected with 33 votes for, 36 against, and no abstentions. The Council then debated the Green Group's amendment, which was also rejected with 3 votes for, 34 against, and 32 abstentions.

Subsequently, the Council debated the Executive Mayor's original budget proposal. Despite arguments that the budget was balanced and demonstrated financial discipline, it was ultimately rejected by a vote of 34 for and 35 against, with 32 abstentions.

Following the rejection of the budget, the Chief Finance Officer outlined the legal requirement for the Council to set a budget by the statutory deadline of 11 March 2024, highlighting the severe financial, legal, and reputational consequences of failing to do so. The Chair advised the Executive Mayor to reconsider the budget proposal in light of the objections and either submit a revised proposal or respond to the objections.

A meeting of the full Council was scheduled for 6 March 2024 to address the budget.

Scheme of Members' Allowances

The item concerning the Scheme of Members' Allowances, originally scheduled to be considered after the budget, was deferred to the meeting on 6 March 2024, as agreed by the Council. This deferral was due to the budget not being agreed at the current meeting.

Exceptional Financial Support Letter

A letter from Simon Hoare MP, Minister for Local Government, to Mayor Jason Perry was presented, outlining the Department for Levelling Up, Housing and Communities' position on exceptional financial support. The Secretary of State was minded to approve a capitalisation direction of a total not exceeding £47.439 million for the 2019-20 (£9.439 million) and 2024-25 (£38 million) financial years. This approval was contingent on the Council demonstrating continued progress against its Renewal Plan and meeting specific conditions, including the capitalization of expenditure when incurred and the use of the Public Works Loan Board for further borrowing with an additional 1% premium. The Council was asked to confirm in writing by 28 February 2024 if it wished to proceed.

Budget Setting Advice Note

The Monitoring Officer provided an advice note regarding the Council's legal duty to set a lawful budget by 11 March 2024. The note detailed the significant financial, legal, and reputational consequences of failing to do so, including the inability to pay bills and staff wages, breach of contracts, and potential legal action against Members for misfeasance in public office. It also highlighted the Council's fiduciary duty to ratepayers and the potential for judicial review. The advice note clarified that the Labour and Green Group budget amendments conflated the separate decisions of setting the budget and the Members' Allowance Scheme, and that any proposed changes to SRAs would need to be dealt with under the Members' Allowance Scheme agenda item. The note concluded by emphasizing the imperative for Full Council to act collaboratively to set a lawful budget, reminding Members of their legal obligations and the potential for personal liability.

The meeting concluded at 8:46 pm.