Croydon Council has disposed of over £72m of assets since 2021, with a further £52m expected to be sold by the end of the financial year.
A report, which is to be presented to the council’s Cabinet on Wednesday (6 December), outlined the progress of its asset disposal programme, which is aiming to sell off almost £200m of Croydon’s assets to “get a grip” of its £1.4bn debt.
The report detailed that the total value of disposals completed to date since “government intervention in 2021” is £72.9m, which includes the sale of Croydon Park Hotel (£24.9m) and College Green (£22m). It added that the authority also anticipates selling off £52.5m of assets in 2023/24.
“The council over-achieved its £50m target for 2022/23 capital receipts and is similarly expecting to exceed the target of £45m for 2023/24. It has further targets of £50m for 2024/25 and £50m for 2025/26,” the report said.
In October, Croydon Council revealed that it had sold one of its largest assets the Colonnades a leisure and retail park, which it bought in 2018 for £53m. However, despite the authority not disclosing how much it sold the asset for, an investment brochure detailed that Croydon was seeking offers in excess of £35.5m, £17.5m below what the council paid for it five years ago.
Approval for a further £24.6m
Croydon’s assets are being sold through three tranches, with the report seeking approval for the disposal of tranche two properties valued at £24.6m. It added that the value of tranche one is estimated to be £91m, whilst tranche three is currently under development and will be submitted for Cabinet approval in summer 2024.
The assets listed for disposal in tranche two include two tennis clubs, three golf courses and multiple nurseries.
According to the report, these asset disposals are a “key objective” for Croydon to help balance its books and become financially sustainable. This is due to the council issuing three section 114 notices in the past three years, with the latest being in November 2022.
The ongoing financial situation at Croydon has been partly caused by a failing housing company Brick by Brick and unsuccessful commercial property investments.
In 2023/24 the council required a capitalisation direction from the government of £63m to balance its books, with its medium-term financial strategy demonstrating an ongoing budget gap of £38m per year from 2024/25.
“The council’s challenging financial position requires it to review its assets regularly and only hold those assets in its ownership that are vital for service provision,” the report added.
The news of Croydon’s asset disposals comes as a report by the Institute for Public Policy Research (IPPR) and IPPR North in the summer revealed that an estimated 75,000 council assets have been sold in that time, which are worth around £15bn.
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