By Tara O’Connor, local democracy reporter
Croydon council has officially gone to the Government for a £150 million bail out.
The capitalisation direction, a loan from the Ministry for Housing, Communities and Local Government (MHCLG), is the key to the council being able to balance its budget in this and future financial years.
The council is facing a £67 million black hole in its budget meaning it has had to issue a Section 114 notice, declaring effective bankruptcy and banning all non-essential spending.
The council is legally bound to balance its budget and is the first to issue the notice since Northamptonshire in 2018.
As long as the council cannot balance its budget, it will need to issue a Section 114 notice every 21 days, the second one was issued on December 2, meaning it is likely to have to issue a third on December 23.
In its submission to MHCLG, the council sets out its current financial position as well as details of the Croydon Renewal Plan.
It includes a number of money-saving measures, which include the potential closure of libraries and job cuts.
Council leader, councillor Hamida Ali, said: “We are clear about the scale of our serious financial situation but we also know what improvements we need to make to put things right in the months and years to come.
“We are asking for this government loan so that we can achieve the change we want to see and meet our legal requirement to balance this year’s budget.”
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