The leader of Croydon LBC has stood down as the council prepares a bid to the Government to stave off a Section 114 notice.

Cllr Tony Newman announced his resignation at a meeting last night, telling councillors he had intended to stand down next year, but had brought forward the date to hand over the leadership to ‘someone who can commit the next three or four years to it'.

Croydon is preparing a formal application to the Ministry of Housing, Communities and Local Government (MHCLG) for a capitalisation direction under which it will be able to borrow money to fund its revenue shortfall of some £22m.

Cllr Newman said that ‘lives depend on' the success of the bid, adding: ‘We need to come together and put Croydon first and make sure we leave MHCLG in a few weeks' time with the required settlement.'

His resignation follows that of cabinet member for finance, Cllr Simon Hall, who announced last week he was stepping down from the role for 'personal reasons'.

Both councillors survived votes of no confidence tabled by opposition members last month.

The council faces a budget gap of £50m, having taken a financial hit of £42m due to the COVID-19 pandemic.

In the longer-term, a financial review has made 75 recommendations to the council after concluding its financial governance was ‘inadequate in relation to some areas of financial planning, budget setting and budget monitoring'.

The review raised doubts over the affordability of Croydon's capital spending plans, advising that they ‘must be reconsidered'.