Mustafa admits council had finance problems at start of year

Croydon’s stand-in CEO Shifa Mustafa has told the unions that, “the council’s finances were challenging at the start of the year”, a significant admission by a senior figure that the Town Hall’s cash crisis was not caused solely by covid-19 spending.

Shifa Mustafa: council’s problems existed before covid-19

Mustafa, who has been a stop-gap chief executive for a fortnight, was responding to Unison’s damning criticism of the on-going consultation process under which drastic cost-cutting action has put more than 400 council jobs under threat.

The council entered 2020 with £1.5billion debt and only £10million in reserves, and with warnings about its resilience – or lack of it – in writing from CIPFA, the local authority finance professional body, and their own auditors. When covid-19 hit, the council spent £62million in the first few weeks of lockdown – money it doesn’t have.

The council is in imminent danger of going bust, and has warned it could run out of money by the end of this month.

The email response was perhaps Mustafa’s last significant act during her brief time occupying the council hotseat. It is not as if she is going to do anything today, as Mustafa usually takes every Friday off, and the government-backed interim CEO, Katherine Kerswell, arrives at Fisher’s Folly on Monday.

The Unison report had criticised the job cuts as being rushed through and “irresponsible”, accusing council directors of failing to show leadership at the time of crisis, and accusing them of using coronavirus as a cover for making deep cuts because of their own failures to manage the borough’s finances.

Mustafa circulated her reply to councillors on Wednesday; it might seem odd that she should have responded to the detailed Unison report at all if she was aware that Kerswell’s arrival was imminent.

In her reply, Mustafa wrote, “The feedback from you and Unison members is important and I want to assure that it has been noted and considered in full. We note and recognise that staff do not wish to see reductions and that staff are concerned about impact on team resources, workloads and on the service provided to residents.

“However, as has been discussed throughout this process, the council’s finances were challenging at the start of the year and have been significantly negatively impacted as a result of the pandemic. This has meant that the council has had to act to reduce spend now to ensure it operates within a legal budget. Staffing has been only one aspect of the review of finances and has not been the only spending measure we have taken. Unfortunately as a consequence we had to make the reductions being consulted on.

“We have worked hard to understand the equalities impact of the proposals and have sought to mitigate any disproportionate impact through the process. We will be sharing the final equalities analysis with you so we can review the final impact after all the measures.”

This “equalities analysis” could prove significant: it is widely suggested among council workers that the majority of the jobs under threat are in lower-paid roles, many of which are staffed by black and minority ethnic or disabled workers.

Trades unions have been highly critical of management’s plans for job cuts at the council

In her email, Mustafa also agrees with the Unison report’s findings that the consultation had in some respects not been managed well, with some workers not being part of the discussion.

She wrote, “We recognise that there may have been aspects of the communication and discussion within the consultation process that could have been better but we have ensured that all staff questions have been responded to, have met our requirements for 1-2-1/team meetings and have kept an updated set of FAQs to ensure all staff had up to date set of information.

“The specific departmental feedback you have provided has been sent to each executive director to consider as they make their final decisions. The implementation of any final reductions will be managed in line with consideration of workloads and service expectations and we recognise that we cannot continue to do the same amount of activity with less staff…

“… The impact on staff is fully understood but for the reasons we have fully discussed throughout the consultation, whilst we have endeavoured to minimise impact, the council has had to make the decision to reduce its headcount as one aspect of reducing spend to meet the significant financial challenge facing it.

“I do want to recognise also the hard work and support that the unions have put into representing their members… and I appreciate all your efforts. For my part, I certainly want to continue to work as well together moving forward.”

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1 Response to Mustafa admits council had finance problems at start of year

  1. Marcus Rigby says:

    Thats what we knew all along, cuts were continually being blamed on covid19 instead of admitting Croydon leadership have completly fucked up council finances, 400 people will now suffer, Jo Negreedy will be happily laughing all the way to the bank, Newman and his cronies will still be in charge. Residents will still ave the blight of Brick by brick making their lives a misery, and there will be no change!!!!!

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