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Officials to investigate possible wrong-doing at council

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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’


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