Croydon In Crisis: Government to take charge of council

EXCLUSIVE: Tory minister expected to appoint an ‘improvement board’ to oversee the running of the borough. By STEVEN DOWNES

Robert Jenrick: doesn’t trust Croydon to manage itself out of the financial crisis

The hopes of senior Croydon politicians to retain some control as they try to manage the council out of its financial crisis are set to be dashed, as Robert Jenrick, the Conservative Government minister, is expected to announce the appointment of an improvement board to oversee the running of the bankrupt borough.

According to senior sources at Fisher’s Folly, the move by Jenrick and the Ministry of Housing, Communities and Local Government is to be much like the steps they took last month over Nottingham City Council.

Those moves followed Jenrick ordering his own rapid review of that council’s financial difficulties, just as he has done with Croydon. The significant difference between the plight of Nottingham and Croydon is that the south London borough’s financial position is far worse.

“No one will be completely surprised if Jenrick decides to do this,” a Katharine Street source said this morning. “After all, everything he’s had reported back to him shows that the council’s directors couldn’t run a whelk stall.”

Last month, when announcing the improvement board for Nottingham, the MHCLG said, “An Improvement and Assurance Board, made up of experts in governance and finance, appointed by the department, will be set up to help the council deliver the report’s recommendations on governance and company ownership…

“… Councils have a duty to manage taxpayers’ money responsibly and are held to account where they are found to have failed to do so. The review team… found that the council’s financial strategy and commercial investment decisions over the past four years have resulted in a very significant budget gap and low levels of reserves.”

Sound familiar?

In Croydon, the council issued a Section 114 notice in November, an admission that it could not balance its budget for the current financial year.

After eight months of emergency spending on covid-19 measures, Croydon’s low reserves of just £7million were insufficient to cover the £66million budget shortfall, which had been caused in large part by the failure of the council’s housing company, Brick by Brick, to make any repayments on loans, any interest payments or profits.

Not in control: council leader Hamida Ali

Croydon is only the second local authority in 20 years to issue a S114 notice. When Tory-controlled Northamptonshire County Council went bust in 2018, the government took control by appointing commissioners to run the authority and lay down plans to break it up.

Last month, Croydon submitted its recovery plan to Jenrick’s civil servants, in the hope that they will provide a massive loan to bail-out the Labour-controlled council. The plan included appointing their own improvement board.

But as happened in Nottingham, this is likely now to be wound-up and a MHCLG-appointed board installed in its place.

It means that, effectively, all decisions and power will be taken out of the hands of the borough’s elected councillors. It will be a huge set-back to Hamida Ali, the old-new leader  of the council.

Others see the move as inevitable. “It’ll just make councillors even more irrelevant than they already were,” one Katharine Street cynic said this morning.

“Katherine Kerswell, when appointed interim chief exec, was given the job with the approval of MHCLG. Since then, increasingly, council officials have been looking to Whitehall civil servants for their instructions, not to the elected council.”

Another source said, “They’d be better appointing commissioners and stop the pretence that there is a meaningful role for councillors in Croydon.”

Another Town Hall source suggested that Jenrick and the Tory government would shy away from that ultimate course of action. “If they did that, then the government would be entirely responsible for Croydon. I’m not sure they’d want to go quite that far.”

Read more: Jenrick orders urgent inquiry into ‘unacceptable’ council
Read more: Council forced to declare itself bankrupt
Read more: Officials to investigate possible wrong-doing at council


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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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14 Responses to Croydon In Crisis: Government to take charge of council

  1. Ian bridge says:

    Perhaps someone will see sense, shut down brick x brick and sell off their ‘assets’

  2. Kevin Croucher says:

    If the improvement board are overseeing everything will we be able to get rid of Fitzsimons and his useless Scrutiny Committee? I hope that they will also be keeping an eye on what Scott is getting up to on the Planning Committee.

  3. Paul Sandford says:

    About time!

  4. Joe Clark says:

    Yes, yes, yes. This really is the only option, let’s be honest, the Cllrs and Directors of Croydon couldn’t organise a piss up in a brewery. Hopefully the Directors are all relieved of their positions asap!!

  5. Readers who applaud this action don’t know what Robert Jenrick is like. Either that or they are Tories.

    Jenrick twice applied to Westminster City Council to have an extension added to his townhouse in a conservation area. On both occasions he was turned down. His wife got the same treatment. Once he became a Tory MP, the local Tories waved his third application through, despite objections.

    As Minister for Housing, Communities and Local Government, he’s done nothing to help people living in tower blocks with flammable cladding.

    In May 2020, he unlawfully approved a £1 billion luxury housing development in east London for Richard Desmond, a Conservative Party donor. This saved “Dirty Desmond” up to £50 million in tax and an additional £106 million on building affordable homes.

    In July he was criticised by the Royal Institute of British Architects for his plans to extend Permitted Development Rights that will allow developers to build slums without any trouble from local councils.

    This month he was condemned by the leader of the LibDems for allowing a new coal mine to open in the UK, despite Tory claims about being “green”.

    Thinking that Robert Jenrick will sort out Croydon’s problems to the benefit of its residents is the kind of mentality that has turkeys voting for Christmas.

    • Jay Beck says:

      AT, yes, we all know these things you have pointed out already, they have all been well documented in the public domain. However, with the two choices on the table, an improvement board coming in from Robert Jenrick’s department is by far far the lesser of two evils, and although Jenrick’s past is chequered, he does have some good people in MHCLG. You cannot leave the current directors in place to get Croydon out of this mess, they are mostly a bunch of over promoted Negrini hangers-on, and have clearly demonstrated they cannot use Croydon tax payers money efficiently. Why oh why would the govt give them a massive multi million pound bail out to waste again? Oh, and i am certainly not a tory voter!

      • Maverick says:

        Totally agree with Jay, it’s time to move on and remove all the directors
        but I think we all know who would love to see the back of ! There needs to be a new team brought in and sort this mess out in a professional manner rather than keep throwing good money away.

        • If you and Tweedledum have got good reasons why “the directors” or anyone other council employee should be removed, let’s see them.

          It was the the councillors who got us into this mess, and Newman, Butler and Scott, are still getting paid out of the publlic purse to represent us and are still members of Croydon Labour Party. They should be expelled and treated like pariahs. If they’d any decency they’d resign and trigger by-elections, instead of clinging on like the sort of thing you’d use a toilet brush to get rid of.

          • Joe Clark says:

            Towcrate, why are you being so immature to start name calling the people above who have posted their opinion? You are correct that Newman, Butler and Scott are very much to blame (along with Negrini and Mustapha) for the disaster that is Brick by Brick, and the ridiculous purchases of the Croydon Park Hotel and The Colonnades shopping centre, and yes they should have gone a long time ago, but the Cllrs aren’t responsible for the calamity that is the waste services in Croydon, and the state of the roads and footpaths in the borough, that is down to the relevant director in charge of those services. The borough i live in is an absolute disgrace, i travel out of here every day to work, and the difference when you come out of Croydon and into Sutton and Merton boroughs is enormous. If they can keep their roads and footpaths in a safe, decent condition, why can’t Croydon?

          • “Maverick” is a pseudonym for a former council employee, which we use to protect their identity, Arfur, something with which you ought to be familiar.

            They, together with Joe, have real insight into what goes on inside Croydon Council.

            Perhaps, after 10 years, I have failed to make this entirely clear: Croydon, under Rouse, Elvery and more recently Negrini, has been a director-led council. The elected politicians carry the ultimate responsibility, but actually, rarely, have they truly exercised the power at their disposal.

            Sure, there is culpability with Newman, Hall, Butler and other councillors.

            But, as an example, the Brick by Brick fiasco was brought to this borough by Negrini, and bunglingly implemented by her and her appointees, Lacey and Mustafridays off.

            There have been a string of questionable appointments (don’t forget: Newman even wanted to make Mustafa interim CEO before the MHCLG stepped in), and other decisions which a vain and stupid council leadership has allowed to go ahead, only turning up for the photo-calls when required.

            The execs and directors hold a responsibility, too, and likewise need to be held to account.

            But there’s no law against stupidity.

  6. Keith Maseyk says:

    Perhaps the over 60’s will get their free swimming back

    • The council is broke, Keith. You’ve got as much chance of free swimming sessions as I have of being the next President of the United States.

      You might be better to concern yourself over whether the council-run pools and leisure centres are ever able to re-open.

  7. Billy James says:

    Not surprised really…

    Any sane person or government would never lend more money to a council and councillors who have woefully misused and squandered Croydon taxpayers’ money and then have the audacity to leave the same councillors in charge except for a few changes…

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