Croydon Council owes £1.6bn - which means it will need to do and spend less in the coming years.
To balance the books, it would need to reduce spending by £130m in the next financial year which would leave the organisation "financially and operationally unsustainable" according to Mr Perry, who has now written to Levelling Up, Housing and Community Secretary Michael Gove asking for more money.
"The previous administration has left a legacy of unprecedented financial mismanagement, toxic bad debt and a lack of governance and transparency that shames Croydon and continues to have a long-lasting impact on the sustainability of our council," said Mr Perry. "Despite the hard work of staff to support the council's recovery, the toxic level of historic debt means that Croydon is trapped in a vicious cycle.
"Even with government support, the coming years will be incredibly financially challenging for Croydon Council. Ultimately, this will mean the council needs to do and spend less, with significant spending reductions."The council's Labour group has previously denied it is to blame, saying the current administration inherited an underspend as well as a £27m reserve.
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