Croydon Council managed to reduce a £29.2 million overspend to a £0.7 million underspend by utilising reserves and capitalisation directions, according to the 2024-25 Provisional Outturn Financial Performance Report. The report was reviewed at a Cabinet meeting on Wednesday, 23 July 2025.
The General Fund revenue provisionally overspent by £29.2m, but this was reduced after utilising reserves and capitalisation directions*. The Housing Revenue Account (HRA) had a provisional overspend of £6.3m. This overspend will require a drawdown from HRA reserves. However, both the General Fund and HRA capital programmes had provisional underspends of £16.2m and £21.2m, respectively.
The report highlighted that the council's historic borrowing and debt burden continued to be critical to the non-sustainability of the revenue budget. Dialogue with the Ministry of Housing, Communities and Local Government (MHCLG) was ongoing regarding options for further financial support from the government.
According to the report, the local government core spending power was set to increase by 2.6% per annum, but that London Councils expected demand and costs for services to continue to outpace funding.
The Cabinet was asked to note the general fund revenue budget provisional overspend, the unfunded cost pressures, and the progress in medium term financial strategy savings achievement. The unfunded cost pressures relate to increases in demand and market prices at a national, regional and local level. The council has said that these pressures need to be addressed by Government changes to policy and/or funding levels. The provisional outturn Medium Term Financial Strategy (MTFS) savings achievement was £22.3m (80.6%) against the total savings target of £27.7m as set out in paragraph 4.143 of the 2024-25 Provisional Outturn Financial Performance Report.
*Capitalisation directions allow councils to fund revenue expenditure from capital resources.
