CROYDON IN CRISIS: The Report in the Public Interest from the council’s auditors had been well-trailed. But few, if any, expected the undertones of anger from the accountants over the crass mismanagement of the council.
STEVEN DOWNES reports
Courageous: Hamida Ali
It was less than 24 hours since she had been confirmed as leader of the council (“The honour of my life,” she was saying on Thursday night), and the first significant act of Hamida Ali’s time in charge at Croydon Town Hall was to issue a grovelling apology for six years of crass mismanagement by her former boss and mentor, Tony Newman, and his discredited clique.
It was a courageous move from the new leader, but undoubtedly necessary for the mandarins from Whitehall, watching to see whether Ali and her (slightly) new team can accept and learn from the mistakes of the Newman administration in which they had been so happy to serve. It is those civil servants at the Ministry of Housing, Communities and Local Government who will be deciding in the next month whether to agree to the council recovery plan that Ali and her team will be delivering to them.
Ali’s apology came in response to the Report in the Public Interest from the council auditors, Grant Thornton, who were effectively showing the red card to the regime of Newman and his choice of chief executive, Jo Negrini.
Ali had already referred to the report’s findings as “shocking”, though devastating might be a more apposite choice of word.
The audit report had been well-trailed, with Grant Thornton directors warning council committees of its arrival and the borough’s finance consultant providing a report of his own listing 75 separate areas where the council’s conduct was less than “best practice”.
Devastating: the 21-page report from Grant Thornton was released last night
Once the auditors’ report was received (at 5.20pm on a Friday night, the accompanying council press release was at pains to state), it was published in full on the council website and Ali’s mea culpa was issued.
And while many of the points in the 21-page document were expected, what few observers could have foreseen was the sense of utter contempt and anger that the auditors have with the council for the clusterfuck that they had caused. But then, Grant Thornton had been warning Negrini, Newman and his numpties for at least three years.
And no, according to the auditors’ report, the council’s parlous financial position – £1.5billion of debt and a busted 2020-2021 budget – is not just down to covid-19 nor the Tory-led governments’ austerity measures. And now, even the council leader is admitting as much.
In the council’s statement last night, Ali said, “This report highlights serious issues with how the council has managed its finances in recent years.
“These problems have deep roots, but I am sorry we got things wrong and I want to reassure our residents, staff and partners that my absolute priority as the council’s newly-elected leader is to put this right. While a decade of austerity and the covid-19 crisis have had a major impact on our finances they do not excuse the issues this report has laid bare.
Discredited: Tony Newman
“The council fully accepts the findings and recommendations of this report and the council’s new leadership will take swift and decisive action to stabilise the council’s finances and governance.
“My new administration is committed to a new culture which puts transparency, accountability and value for money at its heart.”
Yet while the new leader accepted the auditors’ criticisms, her predecessor appeared still to be clinging on to his old set of excuses and tendency to blame everyone but himself.
Since resigning as leader of the Town Hall Labour group a fortnight ago, Newman had been keeping a very low profile on social media.
Last night, he broke his Twitter silence to write, “Auditors right to publish [Report in the Public Interest] our financial governance has not been strong enough and been found wanting under the further pressures of covid. Cabinet accepted responsibility and supported all the recommendations, and I fully support [Hamida Ali’s] determination to implement them.”
Some Croydon residents – the few Newman, never able to accept criticism, had not blocked on social media – reacted with scorn to this latest exhibition of hubris.
In denial: Newman’s tweet last night
“Is this a parody account?” asked one in response to the former leader’s squirming.
Another resident wrote to Newman, “The Auditors don’t need your endorsement in exposing all that has happened under your leadership. Sometimes, just sometimes, accepting responsibility and showing some humility goes a long way in righting the wrongs of the past.”
For six years, as a loyal ward colleague councillor and cabinet member, Ali had never been heard utter a peep of disagreement with Newman as her leader.
But she did now.
“These problems have deep roots, and while a decade of austerity and the covid-19 crisis have had a major impact on our finances, they do not excuse the serious financial issues in this report,” Ali wrote. “I want to reassure our residents and staff that my absolute priority is to put this right.”
Stinging rebuke: Ali’s tweet came three minutes after Newman
Three minutes after Newman’s tweet, Ali was using social media again.
It reads very much like a corrective, a stinging rebuke to the “nuffink to do with me, guv” tweet from Newman.
“My new administration will take a different approach,” Ali wrote, “we have a new chief executive, I’ve appointed a new Cabinet and I want to work with all parties to move Croydon forward.
“We will be taking swift and decisive action to address all of the issues the report raises.”
Maybe, just maybe, something really will change.
Read more: ‘Tony Newman always has been a coward’
Read more: Brick by Brick has paid nothing to council
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Don’t hold your breath for something to change!
I support Ali and she needs all our support to steer a way through this.
Newman needs to do more than keep a low profile on social medial, he needs to resign.
I agree with Ali’s statement: ‘I want to work with all parties to move Croydon forward’
She must end the patisanism that defined how Newman attempted to do politics and which is manifest in the nasty, sneering way planning is run under Cllr Scott’s whip. He should resign too.
If Ali gets this right she may just bridge the North South Borough rift that Newman and Scott and co took such delight in opening up.
I really think what has happened here does call into question whether the current concept of local government is fit for purpose. Managing local government is increasingly complex, but the quality of councillors has almost certainly not kept pace with the the level of complexity. In addition there are probably too many councillors who simply carry on for too long, serving their community but becoming institutionalised into not rocking the boat. This is not just a Labour issue of course. When an elected administration is then controlled by a clique of dominating/bullying leaders, the councillors are unwilling/unable to stand up to the clique, partly because they do not understand the issues and/or they are unwilling to challenge the leadership. The use of allowances by the leadership to control the party is also a problem.
So there is a lack of scrutiny within the party, and there is often a lack of scrutiny from outside as there is now almost no local media. We have been very lucky that Inside Croydon has flagged up so many issues within the Council, but the beleaguered Labour leadership, though undoubtedly bruised by Inside Croydon’s reporting, was able to carry on until it simply ran out of money.
It is difficult to have any real confidence that the new administration will do any better. It is the same time serving councillors, with their variable quality, facing very significant challenges. Somehow we need to do this differently.
Whilst I’m sure Ms Ali has the best intentions for a new start perhaps she needs to be reminded that she as a councillor and cabinet member was responsible as part of the former administration. I suppose wecould blame covid for not speaking out if one is gagged by a face mask !
Did she know what was going on or was she kept at arms length by Newman on the council’s finances?? And knew nothing about the impending crash.
In 2018 when Richard Simpson, former Dir of Finance resigned that was a flashpoint. The LAB Cabinet must have been given an ominous sign?
Unlikely they just saw it as just other staff turnover.
Just read the report, which clearly indicates gross financial mismanagement, verging on the criminal. The elected officials had wool pulled over their eyes at every turn and seemed incapable of grasping what was going on, despite repeated warnings by the auditors over several years. The intentions of the Labour Administration were probably well-meaning but naïve (“we HAVE to help people in need regardless of cost and the government will bail us out”) but what sticks in the throat is that so much money was wasted by appalling mismanagement and “stolen” by over-paid external consultants and agency workers in the process. Even charities have to stick to their budgets and should be well run.
I cannot understand why anyone competent in business and management would want to get elected to Croydon Council since it requires a massive commitment of time and too much banging of your head against a brick wall, so we are left with this lot I suppose. I am not convinced replacing them with the Conservatives will make much difference either (their record was also bad – I well remember the Water Palace fiasco).
The problem is that there appears to be no day of reckoning for incompetents – they just resign (or get made redundant) and leave it for the next lot to sort out (same as in listed companies as well).
The overspend in social services is the main issue and can probably be addressed by massive cuts, especially to expensive outsourcing, and vastly improved management and regular oversight and review. This is the short term main cash flow issue that has to be addressed unfortunately.
The borrowing of the £1.5bn (headed to £2bn by 2022/23 apparently) was apparently done partly in an ignorant manner with no proper pre-study (especially the Croydon Park Hotel which was bought BEFORE council approval apparently!). The sole purpose of borrowing to buy assets that general a low of returns to help council finances has not been achieved. There appears no prospect of dividends from the purchase of the Colonnades or Croydon Park Hotel and they should both be disposed of ASAP (probably at substantial losses).
Brick by Brick seems to be massively mismanaged and its management is uncooperative and opaque in its dealings with its shareholder (according to the auditor), for which I blame the shareholder, which allowed this to happen. A property developer with their advantages in land acquisition should be hugely profitable and may yet turn out to be if proper management can be found. The management of Brick by Brick seem to have withheld significant information from the Members of the Council and were largely unchallenged, which is a massive indictment on our elected officials. No more money should be put into this operation until it has become cash flow positive and paid off its over-due interest and loans.
The “good” news is that the the numbers are relatively small on the overspend (not the borrowing) when compared with the debts and overspend run up by the central government over the past six months. The issues are solvable (with government help and competent management). The attitude of the new Labour leadership seems positive, which is good new, but obviously they have little say in what happens now since it is largely out of their hands!
The sadness is that there will be a lot more suffering in Croydon as a result of years of mismanagement (some of it initially well-meaning). The voluntary sector will now be even more over-worked and deserves all out support (moral and financial!)
When the council decided to raise my parking permit by 200% because of the size of my car engine and I don’t even drive over 2000 miles per year it is not fair. They stop me from going to my gym because I don’t have a car. They should go back to the old way everybody pay the same for there parking
Croydon Labour borrowed because the government made it possible but it cannot be made the excuse – Negrini , Newman, Hall stupidly/naively/arrogantly thought the government or somebody else would bail them out or extend the terms if all went shit.
It did go shit. But the government rightly didn’t bail them out in the same way they don’t bail you or I out.
The difference between the fools running Croydon and the more responsible people running other borough’s is that Croydon leaders took no personal responsibility for their actions. Negrini, Newman, Hall thought Croydon was ‘special’ and there would always be a special government plan just for them. They could not have been more wrong.
Some might say the responsibility put on local leaders and senior officials is too much but I say just get the right people to do the job.
I don’t support the claim that the Tories would have done the same were they in power in Croydon. The Fuck-up we have in our borough and the resultant £1.5billion over spend is down to a small bunch of exceedingly irresponsible and crass individuals who failed on a leadership level and a personal responsibility level to run our council.
Don’t think the Labour administration will survive the next council election.
The damage is so great the borough would take 5 years to recover, if at all, with the rather lacklustre social economic situation from Covid19 shock.
Money is in very short supply and Croydon council needs more than it can muster.
Don’t forget, it was only a few weeks ago that they gave Newman a vote of confidence,
We are going to suffer now and for the foreseeable future, because of very incompetent people running Croydon Council