Council chiefs knew at least since the end of last year that the borough’s finances were in deep trouble after a resilience survey included an adverse auditor’s opinion, though the chief executive used the experts’ report to promote her career. WALTER CRONXITE reports
Monday night’s council cabinet meeting saw the Labour leader Tony Newman and his loyal numpties trot out as an explanation all the usual lines about the government’s broken promises over funding to meet the demands of the covid-19 crisis, though there was no real apology for the council financial crisis facing the borough’s residents, nor to the council staff who are about to lose their jobs.
The council last week started handing out redundancy terms to hundreds of staff, many of them frontline workers throughout the coronavirus lockdown, as it implements 15 per cent budget cuts across all of the authority’s services – including the children’s services department that is not long out of special measures.
Yet the council’s finances were known to be in danger of collapse at the end of last year – months before the covid-19 pandemic hit London.
How do we know this? Because Jo Negrini, the £220,000 per year council chief exec, admitted as much when she did one of her regular pieces of grandstanding in her unstinting efforts at self-promotion.
Negrini often ignores correspondence from residents – those who pay her generous £220,000-plus salary package – and she even fails to respond to the borough’s elected representatives when they have important questions about how the council is being run. But somehow the chief exec always manages to find time in her busy schedule to pen pieces for the trade press, or allow herself to be asked soft-ball questions by less-than-critical reporters.
And in January this year, she even managed to boast to the Local Government Chronicle about how her council was prepared for any eventuality.
The article was published on January 23 – two months to the day before the covid-19 lockdown was declared.
It followed the publication of a “resilience index” from to CIPFA, the Chartered Institute of Public Finance and Accountancy, which showed that Croydon Council was at high risk, or had failed, in six of their 11 litmus tests of whether a local authority could withstand a period of crisis.
CIPFA’s resilience indicators found a similar state of affairs in Fisher’s Folly to that reported by the Institute of Fiscal Studies last month.
CIPFA’s resilience index looked at factors including the council’s levels of reserves, the rate of depletion of reserves, the proportion of budget spent on social care, and Croydon’s levels of debt – at £1.5billion, greater than any other borough in London.
Significantly, CIPFA’s indices also had an adverse auditor’s opinion, which according to the Chronicle is judged by the accounting body “to be an indicator of potentially poor governance”.
No one accused the Local Government Chronicle or CIPFA of “scaremongering” when they reported these findings.
But what was Negrini’s response to a significant vote of no-confidence in her management of the council’s finances?
Negrini is the council chief who famously dismissed a reporter’s questions over her bungled handling of the £1.4billion Westfield non-development in the town centre by stating “we’re not stupid”, claiming that the council had a contingency plan should her developer mates pull the plug. And six months ago, her response to the damning findings from CIPFA was to smoothly assure her colleagues running councils across the country that this time she was “not sitting back waiting for calamity to hit”.
Which, with 50-50 hindsight, might not have been the cleverest thing to say with a global pandemic heading for Europe.
“Chief executive Jo Negrini told LGC she recognised that Croydon was regarded as one of the councils most at risk by CIPFA, but said the London borough was aware of and managing the risks it faced. She rejected the suggestion the council would run out of reserves,” was how the Local Government Chronicle reported the matter at the time.
Negrini was appointed council CEO by Newman in July 2016. In the past four years she has overseen the borough’s debts – which had been reducing below the £1billion which the Tories left behind in 2014 – grow by more than 50 per cent, while the borough’s reserves have been cut to just £10million.
When her experienced and respected finance director, Richard Simpson, quit the council abruptly at the end of 2018, she didn’t seek to replace her executive director of resources with anyone with finance experience or accountancy qualifications, but instead handed a promotion to her close colleague, Jacqueline Harris-Baker, the borough solicitor.
January’s LGC article shows that Negrini and Newman’s preferred narrative – that the council’s current cashflow crisis is all because of covid-19 – is simply using coronavirus as a convenient smokescreen for longer-term financial mismanagement on the chief executive’s watch.
In the Local Government Chronicle article, with no covid-19 to blame at that time, Negrini chose to pass the buck elsewhere.
“We are not sitting back waiting for calamity to hit,” she said.
“It’s very clear that the system is completely broken due to social care. There’s too much demand for adults and children.”
Of course, Croydon has suffered huge reductions in its grant from central government since 2010. But so has every other local authority in the land, and few of those were on the financial cliff edge that Negrini had driven Croydon to by the end of 2019.
And yes, Croydon does have unique responsibilities, such as being responsible for 10 per cent of the country’s unaccompanied asylum-seeking children after they arrive in the borough to register at the Home Office immigration centre on Wellesley Road.
“This is pertinent to the reserves level as we have a shortfall of government funding. We are carrying a £9million debt from day one every year,” said Negrini. Which might be considered to be a fair point if one was to ignore the amount of other borrowings the council undertakes with casual ease, such as on Monday when Negrini oversaw the council saddle itself with a further £30million of debt in the latest bail-out of one of her failed pet projects, Brick by Brick.
Easy money, borrowed at historically low rates of interest from the Public Works Loans Board, is of little concern to Negrini.
“Am I happy with that level of debt?” she said in the LGC article.
“I’m more concerned about our level of reserves than our level of debt. This administration’s absolute priority is around housing. We are very much embracing people here who are in housing need.”
She said this knowing at that time that, her Brick by Brick pet project had managed to deliver just three purpose-built one-bed council homes since 2015. A council chief executive whose “absolute priority is around housing”.
• It is worthy of note, as Negrini and her exec directors begin culling the jobs of council workers, that Monday night’s virtual council cabinet meeting was (with the exception of some committees, such as planning) the last large-scale gathering of Town Hall business for nine weeks.
Tony Newman, Paul Scott and Alison Butler (the latter two between them receiving nearly £8,000 per month in council allowances), obviously need to pack their buckets and spades and head off on their holibobs. Despite the council’s financial crisis, no emergency meetings, virtual or otherwise, have been arranged over the summer. The next full meeting of the council won’t take place until Monday, October 12.
- A level of ineptitude which would be tolerated nowhere else
- Kakistocracy: Butler forced into £6m bail-out of Brick by Brick
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