The Government is sending commissioners to take some control of the running of Croydon Council, despite Mayor Jason Perry's insistence that his administration "is not failing".
The four commissioners will be given sweeping powers over the council's leadership, governance, financial management and senior appointments, effectively allowing them to override key decisions if necessary.
The announcement follows growing concern in Whitehall over Croydon's financial stability. Last month, Minister for Local Government Jim McMahon warned that the borough's financial position was "deteriorating rapidly" and that a "short, sharp reset" was required.
Mr McMahon confirmed on Thursday that commissioners will be empowered to oversee, challenge and directly intervene in the council's key functions. "I have concluded that it is both necessary and expedient for me to exercise powers in the Local Government Act 1999," he wrote.
While elected councillors will remain in post, the commissioners will now have the authority to influence and, where needed, override significant decisions. Mr McMahon described the intervention as essential to ensuring Croydon complies with its legal Best Value Duty, a standard the council is currently not meeting.
"I expect the council to drive its own improvement with the support, challenge and advice from the commissioners," Mr McMahon stated. "To safeguard the process, some commissioners will have powers to exercise certain functions to ensure compliance with the Best Value Duty."
The announcement confirms the Government's intent to steer Croydon back towards financial solvency, and comes just a week after Mayor Perry told residents he would "stand up" for them and push back on what he saw as any oversteps by commissioners.
While facing some criticism for his confrontational stance, Cllr Perry has also said he will work with the appointed team. Conservative Cllr Perry was also blasted last month for calling the Labour government's then-planned intervention a "naked political attack".
Speaking to the Local Democracy Reporting Service (LDRS) last week, he said: "If we get to a position where they [the commissioners] say council tax needs to go above the cap or that services need to be salami sliced, I will oppose those decisions."
Following Thursday's confirmation, Cllr Perry reaffirmed his opposition to the intervention. "We feel that the introduction of commissioners is the wrong decision for Croydon and its residents," he said. "It does not feel fair or consistent in line with the lower levels of intervention placed on other councils.
"Since I was elected in 2022, we have worked relentlessly to bring stability to the council's finances following the catastrophic financial and governance collapse in 2020. We have made major strides in improving and rebuilding this organisation, and that progress has been clearly recognised by external partners.
"In response to the Government's 'minded to' decision, we submitted serious, credible proposals to address Croydon's challenges. It is deeply disappointing that neither these nor the council's substantial progress, including significant improvements to leadership, governance and culture, have been recognised."
The intervention comes as Croydon continues to grapple with deep financial challenges. Figures released this week show the council overspent its budget by £30 million last year, requiring £136 million in exceptional financial support to stay afloat.
The borough is also burdened with £1.6 billion in legacy debt and spends £70 million a year simply servicing that debt.
Croydon has been under the oversight of the Government's Improvement and Assurance Panel (IAP) since it issued a Section 114 bankruptcy notice in 2020.. The IAP was intended to provide oversight and challenge, but Mr McMahon's latest report cited a "lack of urgency" during that period and warned that the council was again approaching a fresh financial crisis.
He also described the council's ongoing reliance on emergency financial support, which has totalled £553 million since 2021, as unsustainable.
The decision to send in commissioners was made despite 35 formal representations to the government following the publication of the 'minded to' letter last month. These included submissions from charities and third sector partners who also opposed the intervention.
The four appointed commissioners are Gerard Curran (lead commissioner), Debra Warren (commissioner), Jackie Belton (commissioner) and Councillor Abi Brown OBE (commissioner for political and governance oversight).
The new commissioner-led intervention will last up to two years, with a review after 12 months. The council will be required to continue implementing its Stabilisation Plan and transformation programme under commissioner oversight.
Progress reports will be submitted every six months. If improvements are judged sufficient, some powers may be returned to the council before the end of the two-year term.
Croydon Council will also be required to cover the cost of the intervention, including providing administrative support to the commissioners.
Labour Councillor Rowenna Davis, who will run against Cllr Perry in next year's Croydon Mayoral election, gave her view on the state of the borough following today's announcement. She told the LDRS: "The Conservative Mayor Jason Perry promised to fix the council's finances.
"Three years into this Conservative council Mayor's leadership: our council tax has gone up. The budget gap has gone up. The debt has gone up.
"And our services, our libraries, our council youth workers and our lollipop officers, have been cut down. Today, the national government have said they are bringing in independent experts to get a grip on this mess.
"I for one will work constructively with anyone who can help Croydon Council get back on its feet so it can do the job we pay it to do - serving Croydon's residents."
Thursday’s announcement was part of a broader update from Mr McMahon, which also confirmed further intervention in Thurrock Council and provided updates on Best Value Duty oversight for Dudley Metropolitan Borough Council and Liverpool City Council.
