After years of financial skulduggery, including the sell-off of public assets, Labour Party-run Croydon Council in south London effectively declared bankruptcy on November 11. It issued a Section 114 notice under the 1988 Local Government Finance Act, which councils are required to do if they do not to have sufficient financial resources to function.
The council has a budget deficit of £66 million and total debt of £1.5 billion.
After making its announcement, the council was legally obliged to cease all spending apart from on statutory services and to safeguard vulnerable people. Existing commitments and contracts must continue to be honoured.
The cuts to come threaten hundreds more job losses and cuts to public services already pared to the bone for a population of nearly 390,000 people. This week the council outlined a “renewal” programme of spending cuts that “will require one of the