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Croydon London Borough Council
Section 114 notices: November 2020, November 2022, November 2023
Summary
Croydon is the only English council to have issued three separate Section 114 notices, all within three years. The root cause was around £545m borrowed from 2018 onward to invest in commercial property — a hotel, a retail park, and a council-owned housing developer — nearly all of which lost most of its expected value once the pandemic hit. A £120m government bailout briefly lifted the notice in 2021, but the underlying problems resurfaced twice more.
The numbers
£545m
Total commercial property borrowing
£31.3m
Croydon Park Hotel purchase
£53.5m
Colonnades retail park purchase
~£200m
Invested in Brick by Brick
£120m
2021 government bailout
15%
Council tax rise granted, Feb 2023
Timeline
2018
Croydon sets up an Asset Investment Fund and buys the Croydon Park Hotel (£31.3m) and the Colonnades retail park (£53.5m), alongside investing roughly £200m in Brick by Brick, a housing developer the council wholly owns.
2018–2020
The investment strategy is approved with, according to auditors, almost no real scrutiny. Forecast returns of £2.4m for 2021/22 are later revised down to just £82,000.
June 2020
The Croydon Park Hotel closes under pandemic restrictions and falls into administration.
August–October 2020
Chief executive Jo Negrini resigns in August; council leader Tony Newman, deputy leader Alison Butler, and finance cabinet member Simon Hall all resign in October.
October 2020
Auditors Grant Thornton publish a report highlighting the council’s "deteriorating financial resilience" and inadequate oversight of its investment strategy.
11 November 2020
Croydon issues its first Section 114 notice, banning new discretionary spending.
March 2021
The government approves a £120m capitalisation direction, allowing Croydon to balance its budget and lifting the notice — conditional on working with an Improvement and Assurance Panel.
November 2022
Despite the bailout, Croydon is forced to declare bankruptcy again — its second Section 114 notice.
February 2023
Croydon is granted special permission to raise council tax by 15% — well above the normal cap.
July 2023
Levelling Up Secretary Michael Gove puts Croydon's Improvement and Assurance Panel on a statutory footing, giving it the power to direct rather than merely guide the council, citing newly discovered historic issues.
November 2023
Croydon issues a third Section 114 notice, again unable to balance its budget for the coming financial year.
Ongoing
A separate investigation (“RIPI II”) examined a £73m refurbishment of the Fairfield Halls arts centre for possible fraud; a £310,000 Kroll investigation found evidence of "direct personal" benefit in the public domain but did not lead to further police action. The council’s slow asset-disposal programme continues, and a government panel has reportedly pushed for Fairfield Halls itself to be sold.
Key figures
Jo NegriniFormer chief executive; resigned August 2020
Tony NewmanFormer council leader; resigned October 2020
Mayor Jason PerryElected Conservative mayor overseeing recovery since 2022
Katherine KerswellChief executive during the recovery period
Where things stand
Croydon remains under statutory oversight from its Improvement and Assurance Panel. Asset disposals — including community buildings and sports facilities — are proceeding slowly, and the council continues to face pressure over the future of cultural assets like Fairfield Halls. Whether the underlying financial position is now genuinely stable, after two failed recoveries, remains an open question.
Sourced from council and government reports, the Institute for Government, CIPFA, Local Government Chronicle, Room151, and contemporary news coverage. Some figures vary slightly between sources depending on scope and date — where that happens, we've noted the range rather than picking one number.