A government appointed financial watchdog has announced it will withdraw from Croydon by July 2025, saying the council, which has filed for bankrupcy 3 times in 2 years, is now on a sustainable pathway of continuous improvement.

The IAP was appointed by the government in 2021 after Croydon Council first went bust in 2020. The Report in the Public Interest revealed significant failures in financial management including commercial and residential development in the borough, budget setting and monitoring and financial record keeping.

Tony McArdle, Chair of Croydon’s Improvement and Assurance Panel, said: “Our Exit Strategy reflects the progress that the council has made and the need to maintain this pace of change in delivering ambitious targets for the next 18 months. If the council does so, it should give confidence to the government that the council is capable of sustaining this path of improvement.

He continued: “A plan for the long-term is needed and the council is in discussion with us and with the government over what that might look like.”

Croydon council also issued a Section 114 notice in November 2022, a legal requirement for councils to indicate that they will be unable to balance their budget in the next financial year, as a result of their £1.6bn debt.

The IAP Exit Strategy includes plans for improvement in governance, culture and leadership, financial stability and service performance. The 2025 target includes setting a budget for the year on time, restoring resident trust and satisfaction in line with local government averages, balancing the 2025-26 Budget and MTFS (with the help of exceptional financial support if no other resolution is found) and significant improvements in public services including children’s services, and Housing and Adult Social Care.

Mayor Jason Perry said: “The panel’s Exit Strategy highlights the scale of improvements which already have and are being made and our commitment to continuing this – and at pace. We have had to make tough decisions, and this has been a challenging time, but these have been necessary to fix the mistakes of the past and create sustainable services for the future.”

The IAP’s announcement came as Croydon Council released plans for a nearly 5% council tax rise as part of plans to recover the boroughs finances yesterday.

Mayor Perry said in relation to the proposed budget: “I must be clear that, although I welcome the Government’s confidence that Croydon can lead its own recovery, the legacy of past financial mismanagement and the council’s toxic debt burden means we cannot do it alone. Government support is critical to balance our budget next year and more borrowing is a short-term fix, not a solution. I will be continuing to make the case for our borough and working with the government to secure the right support package for Croydon.”

Discussions around the Exit Strategy are ongoing and will next be reviewed at a Cabinet meeting on October 25.