Croydon council in south London has issued a section 114 notice banning all spending except for statutory services for vulnerable people.
It means the Labour-run council is effectively declaring that it is bankrupt.
It’s the first council to take such a measure since Northamptonshire County Council in 2018.
And it’s a sign that a major crisis is hitting local government services.
Officials highlighted extra Covid-19 expenses. Yet Croydon council had a £1.5 billion debt at the start of the pandemic.
It has spent hundreds of millions of pounds buying up businesses and commercial properties in the town centre, only for revenue to drop during lockdown.
Council leader Hamid Ali said, “The Covid-19 crisis and a decade of austerity have had a major impact on our finances.
“But it’s clear the council has also made mistakes, and I am committed to fixing that.”
Yet the council wants ordinary people to pay for its mishandling of cash and Tory austerity—by slashing 400 jobs.
Croydon isn’t alone.
A survey by the County Councils Network said just 22 percent of local authorities are “confident” they can deliver a balanced budget next year without drastic cuts.
And just one of the 36 councils surveyed said they could set a balanced budget for 2022-23.
In Tower Hamlets, east London, fears are growing that the borough’s Idea Stores could be cut. These buildings contain libraries, adult learning services and “digital hubs”.
A report presented to the cabinet last month suggested that Idea Stores services be reduced, and the Cubitt Town Library closed.
The report by Neville Burton, corporate director, also suggested that evening staffing levels be slashed, and Sunday hours are cut from six to four.
A public consultation is due to be begin later this month. The battle has to start now to save vital services and jobs.
Workers in Tower Hamlets struck over the summer against the Labour-run council’s push to sack and rehire them on worse contracts.
Similar battles are raging elsewhere.
Hundreds of workers at Sandwell Leisure Trust, near Birmingham, are set to strike on 27 November over plans to dismiss and re-engage them.
Bosses want workers to take up new contracts not on the nationally-agreed pay, terms and conditions.
It is possible to beat these serious attacks on public services.
But unions and workers must mount a serious national fightback now.