EXCLUSIVE: Our Town Hall reporter, KEN LEE, on the unhappy consequences of the council’s poor management that has created ‘the perfect financial storm’
Council CEO Jo Negrini: 15% cuts across the board, though perhaps not to her own £220,000 salary
Croydon Council is to launch wide-ranging consultations tomorrow, July 1, as it begins what in councilspeak they like to describe as a “restructuring”, but what in plain English will mean that more than 500 council staff will be losing their jobs in the next few weeks.
Less than two weeks ago, Tony Newman, the leader of the Labour-run council, was promising, “We are taking all the necessary steps possible to protect the key front line services that our most vulnerable residents depend upon.”
Yet Newman now faces some uncomfortable conversations with union shop stewards and his councillors over the scale of the cuts being proposed.
The 15 per cent reductions in staff are the price to be paid for the coronavirus cash crunch that the council found itself in after spending more than £80million to deal with the immediate demands presented when confronted with the emergency.
According to the council, even after receiving £20million in emergency finding from Whitehall, Croydon has a £62.7million-sized hole in this year’s budget.
The narrative from Fisher’s Folly is that this is not their fault, and the job cuts are a consequence of Boris Johnson’s Tory government failing to honour its pledge, made back at the start of the pandemic, to “do everything it takes”.
But sources inside Fisher’s Folly suggest that the offer of redundancy packages under this enforced “restructuring” will see the council shed some of its highest-paid staff.
“Several executive directors are heading for the exits already,” was the view of one council insider.
Under chief executive Jo Negrini, Croydon now has more staff on six-figure salaries than at any time in history, with three of them paid more than £200,000 per year. That includes Negrini herself, whose £220,000-plus package (plus at least £10,000 as the borough’s returning officer) has increased by 22 per cent since she got the top job just four years ago.
While according to the latest figures available from the council there are now 10 people on the executive floors of Fisher’s Folly who are paid, gross, £10,000 per month.
The average salary of the council’s 3,600 staff is just £22,000 per year.
It is anticipated that it will be these lower-paid employees who will carry the brunt of the job cuts.
*Figures obtained by FoI, and relate to the 2018-2019 financial year
Newman and Negrini have been spinning for all they are worth over the past two weeks to try to pass the buck for the parlous state of the borough’s finances.
But in the past month, outside auditors and finance directors from other London boroughs have had to be drafted in urgently to try to sort out the mess at a council which had already built up a £1.5billion debt mountain even before coronavirus came along, and where its reserves had been run down over the past four years.
At the weekend, the Institute for Fiscal Studies issued a report in which Croydon’s preparedness for an emergency – the council’s “resilience” – compared unfavourably with most other local authorities.
The reality, though, is that these further job cuts come after a decade of austerity which has seen round-after-round of “restructuring” carried out by Tory and, more recently, Labour-run Town Hall administrations, often with disastrous effects – such as when the children’s services department was so understaffed that Ofsted inspectors reported that youngsters in the council’s care were are serious risk of harm.
Tony Newman: facing uncomfortable conversations
The post-covid future for Croydon could see an end to pretty much all “non-essential” or non-statutory services provided by the council.
In an interview given to the Local Government Chronicle, Negrini said, “Local authorities have unfalteringly spent millions extra in our commitment to do everything we can to protect residents. Yet, despite their pledges in March, ministers have yet to fairly compensate us.”
But the very well-paid chief executive then let slip that cost-cutting was already being planned before coronavirus: “Local government was already underfunded before covid-19 and most councils had savings plans,” Negrini said.
“The pandemic now means we’re all spending more but are unable to generate income to help pay for these extra services or to make the savings we need, creating the perfect financial storm.
“As a result, councils nationwide are reporting a significant covid-19 financial shortfall – London Councils estimates £1.3billion across the capital alone. In Croydon, our figure is £62.7million.
“We can’t just assume we’ll be fully reimbursed for our covid-19 work, so we’ve had to act. We are undertaking an urgent review of our finances and have pulled together a comprehensive plan to make sure we can get through this.
“Earlier in lockdown we established a finance review panel… this panel is looking at every aspect of our spending, future savings and income ahead of our revised medium-term financial strategy next month.
“We know there is a battle ahead. We’ll have to make some incredibly difficult decisions that include cuts to services and staff, and we will have to comprehensively change how we work – but it has to be done to protect essential local services.”
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Newman has also just used “Your Croydon” to get his excuses in prior to these cuts, blaming the reduction in business rates, the financial cost of helping those in isolation and insufficient funding from Central Government, in other words it’s all down to the Covid emergency. Talk about re-writing history.
Could just drop the “allowances” paid to councillors from the current thousands of ££ per month to a more realistic hundreds of ££ per month for their part time responsibilites??
Would be a good start to saving some of our cash and could save a few jobs…
Just a thought.
So that would save an absolute maximum of £1million.
Where you going to find the other £62million that Johnson promised would be made good?
Sure, it would save jobs though. That was the point I eas trying to make.
No, David, the point you were trying to make was a cheap shot at councillors’ allowances. There are many issues and inequalities about the allowances system, but the basic allowances paid to all 70 councillors in Croydon amounts to less than £250 each per week – just enough to cover some modest expenses.
A net saving of £3million over four years would barely nibble at the £60million-plus cost of covid-19.
So what’s your way of really saving jobs and getting the government to honour its promises?
We need to seriously look at the capabilities of those at the top of the council who are making the everyday decisions that invariably saddles this borough with further debt. BrickxBrick, buying inflated properties above market value and a whole host of other poorly thought through decisions by this administration have contributed hugely to the borough’s debt.
I don’t even know if the £1.5bn factors in the development risk thats clearly seeping from BrickxBrick’s operations…….?
For once Tony and Jo are not entirely to blame, a rare event. Some of the present financial difficult of the Council is due to Tory policies and chronic long term underfunding. The trouble is that it takes two to tango and our Council is at least jointly to blame for our present situation. A litany of bad, poor, silly, overambitious and under researched projects has siphoned off millions that could otherwise have been devoted to really feasible regeneration projects. A little research, for example, about the natural history of shopping centres worldwide would have revealed that the death knell for mega projects, such as Westfield, was sounding all over the world.. The big players, like in Dubai and Malaysia, were doing well but suburban malls were already failing a long time ago, long before the Pied Piper Barwell played his seductive pipe and lured us into a financial bog.
Well said Mr. Wright.
Croydon’s finances have been a shambles for many years and now we are getting all the excuses you would expect from an incompetent administration. Not to mention the debacle over Westfield. “It’s not our fault guv.” Well, actually it is the fault of Mr Newman and the way the Council has been run for many years now. Surely, in the face of such failure, it is time for this motley bunch to admit their shortcomings and stand aside.
I am sorry Arno, that’s just another excuse. Every Local Authority has been similarly treated and in the case of Croydon Council they chose to bury their collective heads in the sand and not to live within their means putting services and local people at risk. Please, no more excuses.
There was a Stephen Carr who until recently was the Conservative leader of Bromley Council. Until, that is, he was forced to resign after presiding over a council which had received repeat, critical reports from Ofsted inspectors on its children’s services.
That Stephen Carr was close to Croydon Tories – or at least one Croydon Tory – to know very well how they flogged off the Croydon “family silver”, through unlawful sales of art bequests (and managing to realise a much lower sale price than was promised, costing the people of Croydon millions), how they tried to close down the borough’s libraries while offering book tokens (seriously! Oh, how we laughed!) to residents, paid at least £100million over the odds on a glitzy new council office building, where the leader was caught secretly fixing his allowances, and leaving the Town Hall with a debt mountain of… £1billion.
Bromley’s Stephen Carr, knowing that record, surely wouldn’t be so hypocritical as to overlook such a shabby record in office in order to try to score cheap political points, would he?
Or is there a Stephen Carr looking to re-invent himself as a councillor in Croydon in 2022?
Have you actually read what I have written beyond the first sentence?
It is the very same Stephen Carr.
If you could tell me who forced me to resign I would be very grateful. That way I can contact whoever it was and I am sure they would be happy to correct you. Please desist from printing untruths.
What may or may not have happened in Croydon some years ago is irrelevant and I stand by my earlier posts. Do you challenge the points I made. Is the Council having to finance debts of over a billion pounds costing tens of millions that could otherwise be spent on Council services?
For what it is worth and in the interest of balance I agree with your point concerning members allowances. The question is not what councillors receive rather than do they merit it and that goes for any councillor, Conservative or Labour.
You’re as much as a comedian as your namesake Alan, only not so funny.
According to the Bromley Times from 2017: “His decision was announced in the same week the education secretary Justine Greening said the council’s children’s services were ‘still failing to perform to an adequate standard’ after it was branded ‘inadequate’ by inspectors last year.”
So, yeah, apologies: you clearly were not forced to resign. You just volunteered to jump, before you got pushed. A nice, ordered 10-day replacement process, announced in the week you got dug out by a Tory minister, rather than anything as rushed as you announcing your retirement plans more than 12 months before the lical elections.
We’ll leave it to our readers to determine how credible your position is on that.
Of course a council administration’s record (from a mere six years ago) is absolutely relevant, and for you to try to pretend otherwise just underlines the hypocrisy of you and your party.
And thanks for confirming that you’re likely to be seeking election in Croydon in 2022. The voters of whatever ward you are imposed upon will need to be advised of your record when in Bromley, and assess whether you are any less blundering than “Book Token” or florid-faced Fisher.
Brilliant response
What this champagne swilling pop star earning labour council has to to my Croydon is a crime they have made this once beutytiful market town in to one of the most dangerous and dirty towns in the country it is going to be a slum of the future they are a disgrace but this is how they stay in office the filth and the crime dosent sit on Thier door steep I would love to no out of the population of Croydon how many people pay full or if any council tax ,
What a gross range of salaries. People’s lives are on the breadline. It’s disgusting that poverty exists in the borough while these fat cats are acting like corporate cowboys. Colm Lacey is being paid by the tax payer. The same tax payer he is dismissive of when he wants to bulldoze through his plans. Sack him his side kick and Negrini. Council tax payers are fools.
i certainly agree with Alice.
The salaries in the list are obscene both in the present circumstances and in general.
There is no justification at all for either council employee salaries or councillor allowances to be at that astral level.
The other thing I feel very annoyed about is the concealment of the names of some of the top-level recipients of over-high salaries or allowances. There is no justification for that either. After all, the majority of what they are paid is the taxpayer’s money and we have every right to know whose luxurious lifestyle we are supporting. Can this information not be demanded under FOI…do they have any right to withhold that information?
The Prime Minister earns a good deal less than most of the top earners in Croydon. Whether the present incumbent is worth even that is not a matter for discussion here, but it is a valid comparison none the less.
The whole ‘system’ is flawed. The argument used by local authorities throughout the country is “we have to pay top salaries to attract top people.” In reality, looking at their achievements, these are not “top people.” The health and care staff whose low wages were frozen for a decade, who have been putting themselves in harms way, who have often had to isolate from their families, all to save the lives of strangers, they are the truly top people. Shamefully, they are likely to be the very ones ‘in the firing line’ when the financial chickens come home to roost as we see this government prioritise the builders and property developers.
I am no doubt a dreamer, although in John Lennon’s words “but I’m not the only one.” Wouldn’t it be something if out of all the horror of this year, we come out with a better sense of what constitutes true value.
It would indeed it be something if out of all the horror of this year, we come out with a better sense of what constitutes true value but I fear it won’t happen.
As far as Croydon is concerned the people earning the obscene top salaries and allowances are not in any sense of the word “top people”. Not one of them has come from an equivalent level in the commercial world or has a genuine record of achievement or innovation in a really competitive environment. They don’t ever get any sanction for poor performance. They are all drawn from a narrow, closed circle of Local Government employees, known to each other but not the outside world and, indeed, live in a narrow, introspective, false world of their own. It would be fascinating to put an open advert out, advertising all their jobs at the current salaries, and see what calibre of applicants it attracted. I think we’d all be astonished by how much better value we could get for our money. We do get great value from some Councillors and most of the lower level staff but the top echelons are like cream on the top of a cake: noticeable but of negligible actual value, all calories, no protein.