Officials to investigate possible wrong-doing at council

CROYDON IN CRISIS: Selflessness. Integrity. Objectivity. Accountability. Openness. Honesty. Truthfulness. Leadership. The Nolan Principles in public office are at last to be used as a test of the council’s leaders.
By STEVEN DOWNES

An investigation into whether disciplinary action should be taken against senior figures at Croydon Council – staff and elected councillors – has been started by the Local Government Association.

Under investigation: ex-CEO Jo Negrini

It is just the latest probe into the running of the council under Jo “Negreedy” Negrini as chief exec and council leader Tony Newman, which built up £1.5billion in debts and last week saw the Town Hall effectively admit to being bankrupt with the issuing of a Section 114 notice.

Negrini quit the council at the end of August, but only after negotiating a controversial £440,000 pay-off from the council leadership.

According to Katherine Kerswell, the council’s interim CEO, at last night’s meeting of the scrutiny committee, “We know what happened, that’s in the auditors’ Report in the Public Interest. This independent investigation by the LGA will look at how it happened.”

Ominously for the likes of Negrini and other leading figures at the council, “If the investigation finds that formal questions arise, then that will take place,” Kerswell told the councillors on the committee.

Notice of the LGA investigation is contained in the report going to tomorrow night’s extraordinary meeting of the council, called to discuss the Report in the Public Interest, or RIPI. The investigation is also expected to be on the agenda for more detailed debate at next week’s council cabinet meeting.

“The LGA has been commissioned to support the council in undertaking an independent initial investigation of senior management actions in regard to the findings of the Report in the Public Interest to assess what, if any, formal action is required to be taken under any relevant process,” the council report states.

Tony Newman: which parts of the Nolan Principles did he uphold?

The report lays out that elected councillors – “members” – could be held responsible under this investigation. “Croydon has adopted the Nolan Principles as part of its constitution… These standards are mandatory and lay the foundations to the council’s constitution.

“The Nolan Principles are: selflessness, integrity, objectivity, accountability, openness, honesty and leadership. Croydon has expanded the honesty principle to also include truthfulness.”

As the report emphasises, “These principles apply equally to elected members as well as to officers.”

The report to next week’s cabinet meeting (which has not yet been published on the council website) states: “This independent initial investigation will advise whether there is any formal action to be pursued through any relevant formal disciplinary process.”

There is an offence under common law, Misconduct in public office, which carries a maximum life sentence in prison. “It is an offence confined to those who are public office-holders and is committed when the office holder acts (or fails to act) in a way that constitutes a breach of the duties of that office,” according to the Crown Prosecution Service.

There are not, however, any criminal offences for sheer incompetence or stupidity, both of which could yet be used in the defence of some of those under investigation.

The Report in Public Interest made 20 recommendations, highlighting serious failings in the council’s governance.

It criticised the council leadership for ignoring three auditors’ warnings over low levels of reserve funds, drew attention to the failure of Brick by Brick, the loss-making council-owned house-builder, to make any interest or revenue payments to the council, and it questioned how Newman, as council leader, authorised the £30million, above-asking-price, purchase of the Croydon Park Hotel without proper debate at council meetings. 

Written by external auditors from Grant Thornton, the RIPI was also very critical of the council’s directors of children’s services for their failure to “manage demand” more effectively. Following an adverse Ofsted inspection of Croydon’s children’s services in 2017, more than £30million extra funding was directed at the department in an effort to improve its Ofsted rating from “Inadequate”.

The report to the council meeting tomorrow says, “This independent initial investigation will advise whether there is any formal action to be pursued through any relevant formal disciplinary process. The decision to undertake this independent initial investigation supports the council’s commitment to being open and fully accountable for the actions that have led to the report being issued.”

And it adds, “The investigation will report to the interim chief executive in the first instance.”

Alison Butler, the former cabinet member for housing: which parts of the Nolan Principles did she uphold?

Today, a council staffer told Inside Croydon: “If it wasn’t for the fact that those councillors involved have such little understanding of business and economics, it would be a case of corruption and a referral to the Director of Public Prosecutions.

“Let’s hope the LGA don’t whitewash this and the actions of the council go to a public inquiry. People need to be named and shamed. There should be no hiding place and no stone left unturned.”

The LGA investigation is just the latest is a slew of reviews and consultants’ panels poring over the running of Croydon Council over the past four years or so, but it could yet have the greatest consequences for those at the centre of Town Hall business in that period.

Of the other reviews, the “rapid review” ordered by local government secretary Robert Jenrick is now expected by the end of this month, according to Hamida Ali, the new council leader, speaking at last night’s scrutiny committee. The findings of this external team will influence whether the council will receive a vital bail-out loan from government.

But Ali said “more time is needed” for a report on the council’s capital programme, which was supposed to have been ready for next week’s cabinet meeting. And the “strategic review” by consultants Price Waterhouse Coopers into the management of the council’s various companies, including Brick by Brick, has been asked to do some further work, according to Ali, and now may not report until next week.

Tory leader Jason Perry: demanding reports be published in full

Responding to the news of the LGA investigation, Jason Perry, the leader of the council’s opposition Tory group, said, “Given the seriousness of the financial collapse of Croydon Council, it is only right that a full review of what role was played both by elected members and officers is undertaken.

“It is imperative that the council makes public, in full, the results of its investigations. Councillor Hamida Ali, the council leader, said at scrutiny last night that one of the ‘New ways of working’ that would characterise her administration was being ‘a much more transparent, open and honest council’. We very much hope that Councillor Ali will make good on this promise and publish all reports in full.”

And Chris Philp, the Conservative MP for Croydon South, welcomed the LGA investigation.

“I am pleased to hear the LGA will be leading an investigation into the shocking and reckless actions that Croydon’s Labour-run council have taken in recent years,” Philp said.

“Individuals – both officers and Labour councillors – should be held personally to account for what they have done. We need to know who approved buying the Croydon Park Hotel for £30million without any investment plan being out in place – a hotel that has now gone bust. They should be held accountable.

“Similarly, those Labour councillors responsible for sinking quarter of a billion pounds of taxpayers’ – that is our – money into the disastrous Brick by Brick developer should be held to account for their reckless actions. These people recklessly gambled with this money – and lost.

“These individuals should take responsibility for what they have done. They should not be allowed to hold official or elected office again.”

Read more: Brick by Brick has paid nothing to council
Read more: Council ignored five warnings on reserves
Read more: ‘An accountant could have foreseen this more than a year ago’
Read more: ‘One of the biggest casualties of council crisis is our trust’


About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
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9 Responses to Officials to investigate possible wrong-doing at council

  1. Michael Lott says:

    An investigation into the activities of the the elected members is of course welcome. Without wishing to prejudge, one feels that all of this is more catastrophic cock up rather than deliberate fraud. But Negrini presumably was paid serious money to know better. If dereliction of duty on her part is established, what impact, if any does that have on the £440,000 treasure trove she has walked off with?

  2. moyagordon says:

    Pull the other one! Pleading ignorance for financial mismanagement because you don’t know enough about business and economics is a bit lame. Surely it’s possible to get the necessary advice. Or else make people aware that you shouldn’t be asked to make decisions on things you don’t understand.

  3. Selflessness. Integrity. Objectivity. Accountability. Openness. Honesty. Truthfulness. Leadership. The Nolan Principles.

    When will the crowing crony-loving Croydon Conservatives realise that these rules apply to them too? They’re doing their best to ignore the PPE scandal that has seen millions of pounds of our money given to their friends and donors for over-priced and/or useless safety equipment.

    • Colin Cooper says:

      Probably the same day that the Labour Party and all the other self-righteous political parties learn what all those words actually mean and that they also apply to them (in Croydon and the rest of the country too!)

  4. Another Croydon staffer says:

    While trawling the sewers of Croydon council, irony has never been in short supply. And yet, nothing could prepare us for the surreality of members announcing the intention of buying Croydon Park Hotel without undertaking due diligence.

    It was clear from the outset that the hotel was failing and needed a cash injection, when we were ushered into the foyer the red carpet was plainly subject to wear. Us mere workers were assured this “investment would have been looked at”. The reasoning behind paying over market value was to secure a venue for staff meetings, or so we were told. Comrade it may have been the intention was to provide penthouses for the ruling elite so they could live in Croydon and “be at one with the people”. We will never know the truth as any business case for spending such a large sum of money on one building is about 90% fraudulent and not in the public domain.

    Brick by Brick is an ecosystem of mirages. So, the question is: What will the labour party do? It’s no secret that Newman was told to go. But how have others involved in this faired? Is it really just a few bad apples; or, whether the incessant cheating, lying, and indifference to the people they are supposed to represent still permeate the highest echelons of cabinet?

    Is our new leader who proclaims that members are lay people that need training in finance the correct person to be leading a transparent and honest regime change? The attempted silencing of staff and the criticisms of senior managers will be likened to a game of whack a mole.

  5. Phouse says:

    Do the current investigations include a review of how the Brick by Brick planning applications were approved, contrary to all their planning policies? And have Brick by Brick paid all their CIL contributions when they started their works? I doubt it, but how do we get the investigators to look at all this in conjunction with their financial mis management?

  6. Resident says:

    Sadly, it’s the residents and the workers who are affected the most. If an employee had committed such acts, it would have been deemed as fraud. An investigation would have been undertaken, they would not have got a payoff, and possibly face criminal charges.

    Why is it not the same for those who mismanaged Croydon’s finances?

    An online petition is needed to make all accountable, even those who raised concerns and did nothing more. Also, why are those who worked with Jo Negrini remaining in employment within Croydon.

    I am really angry about this as so many services are being cut when the people responsible have walked off with pay off or still employed with Croydon.

  7. moyagordon says:

    How this is going to pan out doesn’t seem clear at all at the moment. Where is the accountability? Are tighter controls needed to oversee the running of local councils in the UK? Maybe more oversight from local taxpayers would be good and more interaction with the local community so that their voices can be heard by those running the show.

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