Croydon Council is once again under scrutiny as independent auditors warn that the authority remains in an “unsustainable” financial position. The latest report by Grant Thornton, released this week, delivers a stark message: unless decisive action is taken to reduce operating costs and long-term debt, Croydon’s financial crisis will continue to deepen.
The report issued a rare statutory recommendation, a formal warning requiring urgent action because “arrangements to achieve financial sustainability have deteriorated.” Such recommendations are among the most serious interventions auditors can make, signalling that the council’s recovery plan is faltering. Despite years of government oversight and repeated efforts to balance the books, Croydon Council’s financial crisis shows little sign of easing.
Grant Thornton’s report outlines that the worsening situation over the past year has prevented the council from exiting government support as planned. Croydon Council has effectively declared bankruptcy three times in five years, and relies heavily upon central government emergency funds.
Croydon Council’s borrowing has risen sharply from £51 million to £136 million in just one year, alarming both local residents and watchdogs.
Auditors have warned that without a sustainable debt solution, Croydon cannot demonstrate financial independence or deliver the savings needed to safeguard essential services such as education and social care. Government-appointed commissioners, sent in to take control in August, have been tasked with enforcing best value across day-to-day services. They hold powers to override local decision-making and to intervene directly in financial management, as well as in the appointment and performance of senior staff.
While the overall assessment is grim, the report does acknowledge areas of progress. The council’s pension fund remains well managed, with net assets rising to £1.96 billion, an increase of £205 million over the year. Improvements have also been made to the housing service, supported by a new Housing Assurance Board that includes both residents and independent experts. Additionally, a dedicated officer has been appointed to improve the handling of housing complaints and coordination with investigations.
However, several weaknesses persist. Auditors emphasised that the Future Croydon transformation programme, a key initiative intended to modernise and streamline council services, must now deliver its promised savings without delay. They also raised concerns about special educational needs and disabilities (SEND) services, calling for urgent improvements to data accuracy and financial monitoring. Greater transparency around the council’s reserves was another key recommendation, with auditors urging that updated forecasts and benchmarking data be included in future reports.
Mayor Jason Perry acknowledged the seriousness of the findings but insisted that progress is being made. “Grant Thornton’s report is absolutely right to highlight the elephant in the room – Croydon’s historic debt,” he said. “I welcome the recommendation to deal with it head-on. I have worked closely with the commissioners and auditors throughout this process, and they recognise the huge progress Croydon has made.”
Despite these assurances, the Croydon Council financial crisis remains far from resolved. The combination of spiralling debt, central government control, and long-term structural weaknesses continues to cast a shadow over the borough’s financial future. With auditors, commissioners, and the Mayor all calling for urgent action, Croydon now faces a defining moment: whether it can finally restore fiscal stability or remain trapped in a cycle of dependence and decline.
