Reviving the dynamo of south London: Croydon has fallen on hard times and its economic fortunes, for the first time, are in the hands of the Labour Party. Helen Nowicka reports

'Croydon. . .London's most dynamic borough, trumpets the publicity brochure. Visit the shopping malls, listen to a concert at the Fairfield Halls, take a stroll in the country park. And did you know it is the UK's sixth largest business and commercial centre?

Look beyond the confident hype, and a different story emerges. A walk round the town centre reveals boarded-up shops or discount outlets with megaphoned men hawking their wares: 'Come on now, nothing here for more than a fiver, every one a bargain. Market traders grumble about the lack of shoppers. Prestige office blocks display 'To Let signs, while unemployment has been more than 10 per cent for the past year.

Few areas have seen their fortunes fluctuate as dramatically as Croydon in the past three decades. During the 1970s it was transformed from a market town to a concrete expanse of high-rise office blocks as businesses moved out of central London to take advantage of its cheaper rents and rapid rail connections to the capital.

With the recession of the late 1980s the dream faded. Companies introduced cutbacks and redundancies, leaving many of the middle-aged managers living in the leafy south of the borough jobless and unlikely to work again. House repossessions soared in common with other parts of the South-East, while new technology reduced the number of workers needed in financial services, a sector which provided many of Croydon's white-collar posts. More recently a number of companies have relocated as a result of mergers or streamlining.

The resulting sense of middle-class betrayal manifested itself last month in a drubbing for the Conservative Party in the local elections. Having controlled the borough for 111 years, the Tories were dumped and Labour returned with a majority of 10 seats.

For Mary Walker, leader of the council, Labour's first priority is to encourage the borough's economic regeneration. A councillor for 21 years, she has witnessed the decline of the area's fortunes and wants to bring a broad cross-section of employers to Croydon to prevent it from again being too heavily dependent on one sector.

Consultations are planned with leading employers, small businesses, colleges and trade unions, and a new committee will co-ordinate a strategy. A study has been carried out to assess how long-term unemployment and skills shortages can be tackled. Potential employers are to be encouraged to tour the area, while training opportunities are to be increased.

According to Mrs Walker, small signs of recovery are discernible. 'Things must be picking up a bit because I have had a letter from a company which has bought one of the office blocks and is refurbishing it, and they have bought another block.

It is through a resurgence of the town and resulting increased revenue - via business rates, for example - that Labour plans to fund longer term objectives, namely bolstering social services and education provision. Mrs Walker, a former teacher, emphasises that these are long-term objectives but argues that the Conservatives' rigorous financial management resulted in overcrowded schools and inadequate nursery provision.

''We place a very high priority in allowing parents of nursery-age children to find a place in a nursery school. That will mean expenditure of capital and revenue but we justify that on educational grounds.

'It will be costly but it will be planned within the budget. We have given an undertaking that we will plan things within the budget. We wouldn't be able to do the small changes that cost virtually nothing if we make a gross mismanagement elsewhere.

The 'small changes, aimed at reducing the distance between voters and politicians, are already being implemented. From tomorrow, Mrs Walker, a one-time trade unionist and personal assistant to several of Labour's general secretaries, will hold weekly surgeries at the town hall to stay in touch with public opinion. Committee meetings have also been opened up, with the public invited to submit questions, while polls may be held to decide some local issues.

Mrs Walker says Labour's open approach contrasts with the Conservatives' more insular attitude, and should increase the public's awareness of how the council spends its pounds 239m budget.

'We want to dispel the bureaucracy of the organisation. The Conservatives were in control for so long, they were living in a time warp. They weren't reflecting the rapid changes that had taken place in society.

However, Labour's critics interpret their plans as tinkering around the edges while planning a spending spree. Sir Peter Bowness, until last month the Tory leader of Croydon council, is particularly critical of the creation of a new committee to debate economic development. 'I don't believe that the economic programme is enhanced by a committee, I don't think many things are, he said.

'I find it quite interesting to listen to the new administration talking about their desire to work with business and attract business, I hope it's true. I have to say that many of the developments we have brought about over the years have been opposed. If there is a great change of heart we will support it.

'My fear about the administration that has taken over is that I have yet to be convinced of their commitment to reorganisation and accrual of savings throught the year which can then be spent on services or the council tax. We managed to set a very low council tax of pounds 527.

'I hope they will concentrate on providing quality services at a reasonable price and work in partnership with other agencies in the private sector. I fear we will see a proliferation of committees and staff, and a desire to control rather than enable. I also fear that resources will not be so carefully husbanded and in consequence the quality we have sought to achieve will deteriorate.

(Photographs omitted)