Whitehall picks McArdle to sort out council’s financial mess

CROYDON IN CRISIS: At Monday’s cabinet meeting, the council leadership repeatedly denied that the appointment of an Improvement Board from Whitehall will amount to a takeover. But if it walks like a duck and quacks like a duck…

Tony McArdle: after two years sorting out one bankrupt council, tomorrow he starts in Croydon

Tony McArdle, who has spent the past two years as the lead commissioner sorting out the bankrupt finances of an English county council, tomorrow begins work as the chair of an Improvement Board being imposed on bankrupt Croydon by the Ministry of Housing, Communities and Local Government.

That vital piece of information was announced by Katherine Kerswell, the interim chief exec of the council, who spent half-an-hour doing a double act with Hamida Ali, the council leader, at last night’s virtual cabinet meeting, outlining the seriousness of the coronavirus situation in the borough before describing the latest moves to fix the bankrupt borough’s busted budget.

Significantly, nothing in Kerswell and Ali’s update on the council finances had been delivered to councillors in a written report ahead of the meeting, as would usually be expected. That gave the strong appearance that this was the  kind of uncomfortable information that the leadership wanted to withhold for as long as possible.

On at least three occasions, Kerswell was at great pains to stress to the meeting that the Improvement Board was not some kind of Whitehall takeover, and that the council leader and councillors would still retain control over the council which they had managed to crash into bankruptcy.

Yet McArdle and his Board are expected to be in place for at least three years, according to Kerswell, and they will report directly to the Secretary of State, Robert Jenrick.

She also managed to demonstrate that a form of takeover is exactly what has gone on, by revealing that discussions had been held with MHCLG for £49.7million of property “disposals”, without having shared that information, or the properties earmarked for sale, with elected councillors.

Kerswell and the council had laid out plans for an improvement panel of their own, clearly in the hope of retaining some control over their own fate. Jenrick’s Board trumps that.

Katherine Kerswell: three times denied that Whitehall was taking charge of the council

And in appointing McArdle, fresh from his time working at broke Northamptonshire, MHCLG is giving a clear signal that there is little confidence in the abilities of those who created the mess in Croydon being able to rectify the sorry situation any time soon.

The Improvement Board, which will comprise of four or five members who are expected to be named on Wednesday, is one short step away from the nuclear option, of appointing commissioners as was done in Northamptonshire. Ali and her Labour administration may, for appearances sake, still be in charge in Croydon, but their grasp on power is increasingly weak.

That has been the case for a couple of months already, with any significant decisions being referred to MHCLG for approval. Now, McArdle and his Improvement Board will need to be referred to on everything. There could be some uncomfortable months ahead for some of the council’s less well-regarded exec directors, and some of those who have somehow retained places in Hamida Ali’s cabinet.

As one Katharine Street cynic observed during the meeting, “It would be better to hand back the keys to the Town Hall now. There is no real political control.

“Remove the red-blue politics from the situation, and there’s a chance the Government will treat the town better, rather than use the position to score political points against Labour.

“It would mean Hamida and the council doing what’s best for the borough, and let the government get on with it.”

Another sign that Kerswell and Ali did not want too much discussion of the latest developments last night was the manner in which Jason Perry and his Conservative opposition shadow cabinet were marginalised from the virtual meeting.

“What’s the point?” said one disgruntled opposition councillor, denied the chance to ask any questions. “This isn’t  supposed to be an information share with the cabinet.”

It was 55 minutes before the first opposition member was allowed to speak by Ali, following a succession of platitudinous, blatantly time-wasting mini-speeches from Labour cabinet members, in which they thanked officers, staff at the council’s contractors, the NHS and anyone else they could think of, as they sought to run down the clock.

Jason Perry: missed an open goal

Perry, presented with the open goal of the Labour council effectively ceding control to the Improvement Board, missed his target, and blathered on about having Tony Newman, Simon Hall and Alison Butler chucked out of their party.

Perry’s deputy, Jason Cummings, did marginally better when he took down the attempt at deflection from Kerswell, when she explained that a delay in MHCLG making a decision over a multi-million bail-out for Croydon was because they were handling 25 other councils in financial distress because of coronavirus, with around a dozen of them putting in capitalisation applications like Croydon did last month.

“We are not one of 25 councils,” Cummings said.  “We are the only council that has issued a Section 114 notice.”

There was some concern expressed by Kerswell and Lisa Taylor, the council’s chief finance officer, that the decision-making process in Whitehall over the bail-out might come too late for Croydon to be able to deliver a balanced budget this financial year, or next, with time running out before budget-setting meetings and Council Tax decisions.

Without sharing with the meeting the location of the 35 properties the council has suggested to MHCLG as sacrificial offerings in a fire sale to plug £49million of the £66million hole in this year’s budget, it is understood that they may include some combination of the Colonnades (which cost nearly £50million when the council entered into casino property speculation three years ago), plus the libraries the council has earmarked for permanent closure, the Croydon Park Hotel site and the Selco warehouses on the Purley Way.

Virgo Fidelis: failure to properly  maintain the old building has led to the school’s closure

“How have they arrived at this accurate figure without knowing which assets they plan to flog off?” Tory councillor Vidhi Mohan, denied the opportunity to ask his question in the meeting, resorted to tweeting.

One other measure which should help relieve some of the financial stress is the abandonment of a £100million Asset Acquisition Fund. Under Hall and Newman, the council was still looking for speculative property purchases as recently as last March. Now, that money will be repaid to the government or other authorities it was borrowed from.

“Good job too,” said another Conservative councillor, Robert Ward, “given Labour’s ability to overpay and lose Croydon residents millions of pounds.”

Another site in the borough which might now be sold off to developers is the Virgo Fidelis girls’ school. After 170 years in Upper Norwood, it was confirmed last night that the convent school will close in July. It becomes the second established secondary school in the borough to be closed in 12 months under Alisa  Flemming, the cabinet member for education.

Virgo Fidelis’s fate was sealed when Simon Hall prevented a council committee from discussing the school’s urgent need for millions to be spent on repairs. This school year, the old building has had to be vacated by staff and pupils for being unsafe, with the council now pot-less to be able to contribute to the proper maintenance of a landmark building.

Read more: McArdle will recognise failure when he arrives in Croydon
Read more: Jenrick orders urgent inquiry into ‘unacceptable’ council
Read more: Council forced to declare itself bankrupt

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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
This entry was posted in Croydon Council, Hamida Ali, Improvement Board, Katherine Kerswell, Lisa Taylor, Schools, Section 114 notice, Tony McArdle, Tony Newman, Virgo Fidelis and tagged , , , , , , , , , , , , , . Bookmark the permalink.

4 Responses to Whitehall picks McArdle to sort out council’s financial mess

  1. John Wentworth says:

    The Council will not get anything from the closure of Virgo Fidelis. The site is owned by the religious order of sisters who used to run the scool. It’s up to the Order to decide whether or not the site is sold.

  2. John Harvey says:

    Two possible good points

    1 Jenrick has not given Croydon’s property portfolio to a Tory party contributor to make money

    2 Chance for Croydon to get out of commercial property gambling ahead of Tory players like Spelthorne

  3. Maurice says:

    I had thought the school was an asset in the borough and one of the best schools in terms of educational attainment and Ofsted reports. It will surely leave a gap in provision of school places at that end of the borough

    • You might want to look at those Ofsted reports again, Maurice, and the school’s falling rolls, poor finances and high turnover of staff, including heads. The days of it being a paragon of educational excellence were long past.
      But, as with St Andrew’s, the council did little or nothing to help.

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