Croydon Funding Crisis: Perry & Davis Demand Fair Share 2025

Key Points

• Croydon receives significantly less funding per person (£4,650) compared to Lambeth (£5,077) and Southwark (£5,378).
• Both Croydon’s Conservative Executive Mayor Jason Perry and Labour’s mayoral candidate Rowenna Davis have launched campaigns demanding fairer funding.
• Years of underfunding have deepened inequalities and strained essential services in Croydon.
• The government’s Fair Funding Review, announced June 2025, aims to update the outdated funding formula based on current population needs and deprivation.
• Mayor Perry urges full delivery of the Fair Funding Review to correct years of financial shortchanging.
• Labour’s Rowenna Davis highlights worsening social challenges and lack of support for asylum seekers in the borough.
• Both campaigns seek cross-party support and public backing ahead of the May 2026 mayoral election.
• Fairer funding would help rebuild services and invest in Croydon’s future but will not resolve the borough’s historic £1.4bn debt.

What is the funding disparity between Croydon and neighbouring boroughs?

As reported by Harrison Galliven of the Local Democracy Reporting Service (LDRS), Croydon politicians have raised concerns over the borough receiving notably less government funding than neighbouring Lambeth and Southwark. Analysis by the Institute for Fiscal Studies shows Croydon receives £4,650 funding per person, while Lambeth gets £5,077 and Southwark £5,378.

Labour’s mayoral candidate Rowenna Davis told LDRS:

“Anyone who goes up to the border with our neighbours can look across the street and see a visible difference, there is less fly-tipping and it looks cleaner. The current funding formula has failed to reflect Croydon’s growing social and economic challenges.”

Why are Croydon’s leaders campaigning for fairer funding?

Both Conservative Mayor Jason Perry and Labour candidate Rowenna Davis have launched campaigns to press the government to reform council funding allocations. Pierce Davis explained that years of underfunding have exacerbated social inequalities and stretched the council’s ability to provide vital services.

Mayor Perry, as quoted by Harrison Galliven of MyLondon, urged:

“For far too long Croydon has been short-changed by an outdated system that simply didn’t recognise the pressures we face. We’ve stabilised the council’s finances, restored good governance, and shown what sound management can achieve. Now the government must follow through and deliver a settlement that truly reflects need and deprivation.”

Davis emphasized:

“Croydon now faces some of the deepest social challenges in London but receives less for education, adult social care and environmental services. It is time for that to change.”

What changes does the Fair Funding Review propose?

Announced in June 2025, the government’s Fair Funding Review aims to replace decade-old data with a more equitable funding formula based on current population need, deprivation, and social challenges.

Mayor Perry highlighted the review’s importance in a letter to the Secretary of State for Housing, Communities and Local Government and MP Steve Reed:

“Early government modelling indicates Croydon could gain significantly from the changes, recognising population growth, social challenges, and rising service costs.”

How are the mayor and candidate positioning themselves politically on the funding issue?

The campaigns reflect political competition ahead of the May 2026 mayoral election. Perry has framed his efforts around financial stability and responsible governance, arguing that the council has corrected past fiscal mismanagement. He called for cross-party unity in securing fair funding, stating:

“It’s disappointing that something as important as fair funding … is being treated as a partisan issue.”

Rowenna Davis links current problems to decades of neglect under previous governments, accusing Perry of “scaremongering” about national government policies. She countered:

“I really hope he has learnt his lesson, but I still find the outburst quite unforgivable.”

What does this funding debate mean for residents and services?

Both leaders agree that fair funding is critical for rebuilding public services and investing in Croydon’s economic future. However, the borough still faces a historic debt of £1.4bn, which fairer funding alone would not resolve.

Davis warned:

“Croydon residents already feel pretty squeezed and it gets more and more painful… failing to secure a better funding deal would make life even harder.”

What evidence supports claims of unfair funding?

Data from 2022/23 reveals that Croydon’s funding lags behind its neighbours despite facing growing demands. The Institute for Fiscal Studies has described the situation as a ‘postcode lottery,’ where allocations often do not reflect real local need.

Davis criticises the existing formula for being based on outdated socio-economic conditions, stating:

“The funding formula dates back to a time when Central London was very deprived and outer London was relatively wealthy. That has clearly changed.”

What are the political calls going forward?

Mayor Perry’s open letter, backed by dozens of Conservative councillors and London Assembly Member Neil Garratt, calls on ministers to resist weakening the new funding formula. He invited councillors and candidates from all parties to unite behind the campaign.

Simultaneously, Davis’s Fair Funding Campaign is mobilising public support through petitions and street stalls, aiming to demonstrate widespread backing for change.

How might these funding issues impact Croydon’s future?

Croydon Council became the first London borough in two decades to effectively go “bankrupt” in 2020, a crisis it faced multiple times since. Fairer funding could stabilize the council’s finances, improve services, and support regeneration projects, but addressing the longstanding debt will require additional government intervention.

Calls for a government bailout have grown following the recent £500m bailout of Woking Council. The funding debate remains a critical issue for Croydon residents’ wellbeing and the council’s ability to deliver essential services.