Steve Reed OBE, the Blairite MP for Croydon North, has broken his silence over the collapse of Croydon Council’s finances to make a claim that he had in some way been misled over the state of the bankrupt borough’s books.
Remarkably, after five years of near-total silence on the issue of the council-owned loss-making house-builder, Reed also now says that he “always had concerns about Brick by Brick”, whose failure to deliver promised profits and loan repayments went a long way to breaking the council’s budgets.
Last month the borough which Reed represents became only the second in 20 years to issue a Section 114 notice, in admission that it is broke.
Reed’s reticence to comment on the disastrous mismanagement of the borough, part of which he is supposed to represent, undoubtedly reflects the deep embarrassment caused for him by his previously close colleagues Tony Newman, Simon Hall and Alison Butler. At Westminster Reed, the one-time leader of Lambeth’s “co-operative” council, is now Sir Keir Starmer’s front bench spokesman on… local government.
And while Chris Philp, the Conservative MP for Croydon South, managed to turn up, also AWOL from the Croydon debate was the borough’s third MP, Labour’s Sarah Jones.
Croydon’s Labour MPs have been running for cover ever since the depth of the disaster at the Town Hall became apparent in mid-summer. And while Reed, with a majority of 24,673 at last year’s General Election appears safe from any voter backlash, the same cannot be said for Jones in her marginal Croydon Central seat.
Until now, Reed has kept to the Labour script that blames Croydon Council’s plight on covid spending and a decade of austerity – even though that’s not what the old-new council leader Hamida Ali has said, and is out-of-step with the view of the council’s chief finance officer, their auditors and consultants.
Many of the policies pursued in Croydon by the Blairite cabal of Newman, Hall and Butler had been copied, lifted or pinched from Reed’s own playbook, taken from when he was in charge in Lambeth up to 2012, many of which he continues to support today in his shadow cabinet job.
Reed has always worked closely with Newman and his Croydon clique. Indeed, Newman’s partner, Louise Szpera, has worked as Reed’s office manager at Westminster for the past eight years.
Yet now Reed is claiming he knows nuffink, and is doing his best to distance himself from the shambles of his colleagues’ making.
“In briefings from the council as late as this summer I was told there wasn’t a problem and the council was operating within budget,” Reed told a little-read, council-funded freesheet.
Reed carefully stepped around implicating anyone by name.
“Part of you is aghast that the council wasn’t telling me what was going on, but I am not entirely clear that the council knew what was going on.”
Reed said that when he asked about overspends at the Town Hall, he was told that they had been “reined-in” and were being “managed”.
Eight years after being elected to parliament to represent Croydon North, Reed now revealed a view of Croydon Council that, “It always struck me that it is not a very transparent organisation.
“My view is that when a public organisation, like a council, is providing services to an awful lot of people, it needs to open up its data as much as possible and people in the community need to be able to scrutinise it.”
In 2014, when Newman and his gang won control of Croydon Town Hall with the help of new MP Reed, they did so with a manifesto which promised “the most open and transparent council in the history of Croydon” – which in reality proved to be a stark contrast to the style of governance adopted by Newman once he took office as council leader.
Reed went on: “I always had concerns about Brick by Brick and I said so to the council leader some years ago…”, funny how he never mentioned it at the time.
Reed now claims he wanted “to see greater participation from residents”, and a community-led board overseeing the company.
This sudden discovery of 20-20 hindsight by Reed prompted criticism from Tory councillors. Mario Creatura, the sometime gobby factotum to Gavin Barwell, pointed out that the council’s auditors had given Newman and Hall warnings about dangerously low levels of reserves for three years in succession from 2018.
“Either he didn’t scrutinise properly, is too trusting or is trying to cover his inaction,” said Creatura, a councillor who voted in favour of the Labour council’s budgets in 2019 and 2020.
Read more: What is a S114 notice? What will it mean for the council?
Read more: Council hands government a begging letter asking for £150m
Read more: Jenrick orders urgent inquiry into ‘unacceptable’ council
Read more: Council ignored five warnings on reserves
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