Croydon Council is appealing for a fairer share of national funding, citing a 'postcode lottery' that disadvantages its residents and businesses. The council warns that a continuation of the current funding allocations would continue to punish residents and local businesses who are currently not receiving their fair share of national funding.

The call for equitable funding was a key theme during the Scrutiny & Overview Committee meeting on Tuesday, where members reviewed the 2026-30 Medium Term Financial Strategy Update. The council argues that current funding models fail to account for population, deprivation, and required service levels, leading to disparities in service quality across the country.

Council officers stated that the updated MTFS model reduces the forecast budget deficits for the next three years, but that the council's financial position remained unsustainable. The council continues to work with government-appointed commissioners to identify potential solutions to restore financial sustainability.

As at the end of 2021-22, data from the Office for Local Government (OFLOG) confirmed that the cost of servicing Croydon's debt, at 16% of core spending power, was double that for the median English authority. More recently, the 2025-26 Period 5 Financial Performance Report includes tables comparing Croydon's forecast over/under spend in Adult Social Care and Health and Housing with other London Boroughs. For example, in Adult Social Care and Health, Croydon is forecasting an underspend of £4.0m, while other boroughs are forecasting overspends.

The MTFS Update included a response to the government's Fair Funding Review 2.0 consultation, stating:

There is currently a postcode lottery around the country. There is disparity in the level of services and support for residents, since funding levels no longer match population, deprivation and required service levels. A continuation of current funding allocations would continue to punish residents and local businesses who are currently not receiving their fair share of national funding.

The MTFS assumes a Council Tax increase of 4.99% for all years, the referendum limit for London boroughs for 2026-27. It also includes proposed savings of £35.9m for 2026-27. These savings are planned to come from several areas, including Adults Living Independently (£6.156m), Children, Young People and Education - Helping Families Thrive (£3.400m), Digital Operating Model (£3.700m), and Temporary Accommodation Stabilisation Plan Efficiencies (£3.940m). A full list of proposed savings is available. 1

  1. The proposed savings of £35.9m for 2026-27 include savings from Adults Living Independently (£6.156m), CYPE - Helping Families Thrive (£3.400m), Digital Operating Model (£3.700m), Unified Front Door (£2.800m), Improving Payments (£1.150m), Predictive Analytics and Prevention (£1.000m), Information, Advice and Guidance (£0.800m), Simpler Organisation (£0.500m), Integrated Shared Services (£0.300m), Commercial Excellence (£0.700m), Oracle Improvement Programme (£0.550m), Recommissioning contracts with a local focus (£0.100m), Temporary Accommodation Stabilisation Plan Efficiencies (£3.940m), Improved Collection of Parking Income (£1.000m), Accelerate Adults Living Independently (£0.400m), Access Croydon (£0.111m), Pension Fund Revaluation (£3.800m), Better Use of Council Assets (£1.450m), Emergency and Temporary Accommodation - Demand Management (£0.893m), Increase in Place-based Fees and Charges (£0.918m), Street Lighting LED lightbulbs (£0.507m), External funding of the District Centre Regeneration Team (£0.369m), Corporate disposals programme - reduced Facilities Management costs (£0.300m), Leisure services contract saving (£0.200m), and Other Identified Savings (£0.860m). The impact on local services is not detailed in the provided information. ↩