Croydon Council, the local authority whose leader is afraid of staging a borough-wide referendum, now says it wants the public’s help to sort out its financial mess. WALTER CRONXITE on the inherent contradictions contained within the Croydon Renewal Plan being presented to a cabinet meeting tonight

Old habits die hard.

Having ignored the public for six years, now the Labour-run council wants people’s help

So after six years of increasingly insular and autocratic leadership from the council’s directors and senior Labour councillors, it might strike some – staff and Council Tax-payers alike – as bitterly ironic that there is a report going to the Town Hall cabinet tonight in which council workers and the public are being asked to help dig them out of the hole of their own making.

It is called the Croydon Renewal Plan, and it is part of an emergency budget report which, essentially, is a plea to government to be allowed to borrow another £22million to deal with the immediate covid-sized hole in the borough’s budgets. That, together with the axing of virtually all but the borough’s statutory services and making hundreds of staff redundant.

For Katherine Kerswell, the interim CEO parachuted into Croydon a week ago with Whitehall’s blessing, to extend an olive branch and invite staff to share their thoughts and initiatives is simply shrewd management.

She needs to distance herself from the previous regime of Jo Negrini. Presenting herself as more open to discussion than her predecessor (which, by all accounts, should be quite easy to do) is a good place to start.

Shrewd: interim CEO Katherine Kerswell is getting staff onside

Readers of the Local Government Chronicle will have seen this coming. “You can’t come with preconceptions into these roles – you really have to learn and understand the culture and take stock of what they really want you to do,” Kerswell said of such interim appointments in a recent interview given to the specialist title.

But for the likes of Tony Newman, Alison Butler, Paul Scott and Simon Hall, the borough’s political leadership, to fall back on such a ploy now may be viewed by those who have encountered them during the past six years in charge of the Town Hall as deeply disingenuous, at best.

It is not a coincidence that local residents’ groups managed to get 21,000 signatures for a campaign that used the tag-line, “When did the council last listen to you?”

But if the council is perceived as not having listened to residents between 2014 and today, what chance is there that the same people will start to listen now.

After all, what respect could Newman possibly have for the views of the public he is supposed to serve if, as he has said in the past couple of days, he will block a referendum that has been requested by tens of thousands of electors and then make a manifesto commitment to oppose the outcome of such a ballot when it does take place?

Scott’s role since 2014 in planning in the borough has also been, repeatedly, to ignore the wishes of the public while failing –  perhaps deliberately? – to introduce the sort of protections from development for parks, open spaces and playing fields that Council Tax-payers have repeatedly asked for.

Most who have encountered them come away with the firmly held view that the council’s political leaders hold the public in barely concealed contempt.

Barely concealed contempt: architect and council planning chief Paul Scott

And the Labour-run council has form when it comes to “public consultations”, which are commissioned often at considerable cost (to the public, natch) and which then have their reports filed away in the Town Hall vaults, to gather dust and be forgotten about. The Fairness Commission? Whatever became of that (apart from the juicy £200,000 council money paid to a consultancy run by Labour grandee David Evans)?

And with the borough enduring a climate emergency, what “urgent” work has the environmental commission, established by Newman when he needed to appear a little more green, managed to achieve?

The narrative adopted by Newman, Butler-Scott and Hall is that the council’s financial crisis is “all someone else’s fault”. They blame, variously, the Tory-led government’s austerity policies of the past decade (which has some basis in fact), the demands of covid-19 emergency spending (which also has some truth to it) and, more recently, Jo Negrini.

It’s astonishing how far £440,000 can go when you need a scapegoat for your own short-comings. 

The realities are that there are another 300 local authorities across the country who have also had to endure 10 years of maliciously reduced funding from government, and which have also had to crisis-manage their ways through coronavirus.

MHCLG has Croydon flagged up as a ‘problem borough’

According to sources at the Ministry of Housing, Communities and Local Government, Croydon has been flagged up as a “problem borough” for some time: there is no other borough in London with such deep financial issues, and fewer than a handful across the country are in such a dire plight.

At some point, those responsible for bringing the council to this point may have to take responsibility. The Croydon Renewal Plan may, therefore, be seen as simply an attempt by them to deflect some of the blame, perhaps buy some time.

The Renewal Plan is part of the emergency budget document (and can be read in full in pdf format by clicking here).

“This plan will benefit from the input of all the council’s staff and the communities and people who live in the borough,” it says.

“A programme of engagement will be drawn up as part of developing and implementing the plan.” Which is nice.

The emergency budget report does, at least, have the refreshing honesty to admit that the council is broke and that under any other circumstances, they would have been forced to hand over the keys to outsiders weeks ago.

Inside Croydon reported in July how CIPFA, the local government finance officials’ organisation, and MHCLG had agreed to relax the rules on Section 114 notices – the process under which councils admit that they can’t balance their budgets – because of the huge pressures arising from covid-19.

“With the current forecast overspend of £22.4million and insufficient reserves to fund this overspend we are currently unable to deliver a balanced budget and under normal pre-covid19 circumstances should have issued a S114 notice.

How the council has been advised to spread nearly £80m-worth of cuts over three years

“But as… previously reported to scrutiny and overview committee in August we have not issued the Section 114 notice at this stage due to the change in guidance on this matter.

“Informal discussions have been had to date with the government in regard to a capitalisation direction.”

Which is councilspeak for saying that the council wants to use cash from its capital budgets to help balance its revenue accounts.

As the report notes, “A capitalisation direction is a request to government to borrow capital money for revenue spend. It is not ‘free’ money and must be repaid. It is also not a given that councils are granted this permission. Without this government support it will be very unlikely that we will be able to deliver a balanced budget this year given the forecast overspend, the very limited level of general fund reserves and the little time left in the financial year to make large savings.

“In order for government to consider supporting us financially, they will require a very robust delivery plan that lays out how we will change the council into a sustainable, financially resilient organisation.”

That “very robust” delivery plan will see a total of £79.1million of spending cut from council plans between 2021 and 2024, as the financial review panel recommends spreading the pain over the course of three years.

“Cabinet is recommended to agree to formally ask government for a Capitalisation Direction and to the development of The Croydon Renewal Plan.” It is a Section 114 package by another name.

And the report echoed comments made in Kerswell’s email to staff on Thursday. “If the Government agrees to financially support the council it will give it the time and space needed to make fundamental changes to reset the organisation to deliver a balanced and sustainable budget over the next three years.”

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