Croydon to raise council tax by 15% after bankruptcy

All Londoners will face an increase in council tax from March

Plans to increase council tax in Croydon by 15% have been approved by the government.

Croydon Council sought permission to impose the rise without a referendum after declaring itself bankrupt for the second time in three years in November.

Conservative mayor Jason Perry blamed the hike on "financial failures of the previous administration".

Elsewhere, Thurrock and Slough councils, have also had requests approved to raise council tax by 10%.

In November 2022, Croydon council admitted it couldn't balance its budget for 2023/24 and was forced to issue a Section 114 notice.

It estimated it would need to reduce spending by £130m in the next financial year to balance the budget, a legal requirement for local authorities.

Following Monday's council tax announcement Mr Perry said: "Given the scale of financial collapse Croydon has experienced, getting back on track will require incredibly difficult decisions."

He said the increase in tax would amount to "around an extra £4.50 a week, or 63p a day, for the average property."

Thurrock and Slough councils have also declared bankruptcy, and Thurrock council has asked the government for a £636m bailout alongside the tax hike.

Under current laws a council may only raise council tax by a maximum of 5% a year without a referendum.

However, the government confirmed it received three requests from councils for flexibility to increase their council tax by an additional amount, to provide extra funding to support their financial recovery.

The government said: "Given the exceptional circumstance in these councils and unprecedented scale of financial deficits in each council, the government has agreed to the requests.

"In line with their requests, Thurrock and Slough will be able to raise council tax by an additional 5% above referendum principles applied to other councils, and Croydon will be able to raise an additional 10%."

Council tax is due to rise for all Londoners as of 1 April when the Mayor of London will add £38.55 on yearly council tax bills,

It means the typical household will pay just over £434 to the Greater London Authority, mainly for transport, policing and the fire brigade, as well as the running of City Hall.

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