If incompetent directors can be banned, why not councillors?

CROYDON COMMENTARY: Outsourcing giants Carillion went bust three years ago, and now the directors responsible face possible bans from the nation’s boardrooms. Likewise, incompetent councillors should also be barred from public office, says TERRY McCARTHY

The news this week that there is a move, in the public interest, to ban former directors of Carillion from senior boardroom positions raises pertinent comparisons to the situation faced by Croydon Council and the borough’s residents.

Outsourcing specialists Carillion – who even ran Croydon’s public libraries (poorly) for a while – went bust in 2018 owing a huge sum of money, more than £7billion, resulting in 3,000 people losing their jobs, others their investments, and 450 public sector projects, including hospitals, schools and prisons, were plunged into crisis.

As a newspaper report states, “The Insolvency Service, which handles corporate collapses, said it was seeking to disqualify the directors ‘in the public interest’, in a move that could result in them being banned from acting as UK company directors or in senior management for between two and 15 years each.”

The court proceedings name eight individuals. The former chairman Philip Green – who was once an adviser to David Cameron on corporate responsibility – is among those listed as a defendant, alongside the former chief executive Richard Howson, who left after six years in charge in 2017, months before the company’s collapse.

Former council leader Tony Newman: should incompetent councillors get their collars felt?

If directors of failing companies can be barred from holding important positions, shouldn’t incompetent councillors also be barred from public office, especially when, as with Croydon, they have left a borough with huge debts, greatly reduced services and a loss of hundreds of council jobs?

Do the councillors responsible for Croydon’s financial mess deserve to retain their elected status, as they still have the capacity to influence local decisions?

Back in the 1980s, councillors in Lambeth were banned from office and surcharged when they refused to set a budget and the District Auditor was called in. National legislation has changed since then. There’s not even a District Auditor any longer.

I have tried to determine if there is a protocol for councillors as applies to company directors. Maybe there should be.

Do the residents and Council Tax-payers not deserve similar protection to company shareholders?

Read more: Council forced to declare itself bankrupt
Read more: £36m Brick by Brick ‘risk’ helped to trigger Croydon’s S114
Read more: ‘Tony Newman always has been a coward’
Read more: Jenrick orders urgent inquiry into ‘unacceptable’ council

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9 Responses to If incompetent directors can be banned, why not councillors?

  1. Ernest Thomason says:

    This not the first time the Tories have cocked-up back in 2013/14 of the special needs transport with two private companies sharing the contract and the council not paying one of them which they went bust. Then the disbanding of the dog security service just before the disastrous privatising of Parks and open spaces contract the Park Ranger service was still in-house until 2014 and Quadron Services Ltd took control but later on during the contract was constantly fine for failures on the ground maintenance such as grass cutting etc and not on the park ranger side such as security and cleansing of parks but they realise their could not afford the rangers and make them them redundant which another contractor Idvere took over and made over 14 rangers redundant and made the service to mobile to cover parks that once had on-site staff and their still could not keep to the agreeded Service Level Agreement (SLA) and was brought back in-house. Not a single councillors was held to account for this and some have now left the council with one husband & wife earning over £100,000 between them. How can they justify this?.

  2. Lewis White says:

    The framework of checks and balances –such as the Standards Board, the District Auditor has been cynically destroyed by central government, leaving Scrutiny groups to do the job in local authorities. This is a key problem. They are too close to the action, and may be swayed and even pressurised by charismatic senior councillors and officers who have visionary but unsound “pet projects”.

    I am also wondering about the training given to Councillors in financial oversight and budget resonsibility.

    Councillors are people from a range of backgrounds, few of whom will have had budget responsibility for millions of £’s.

    Directors of companies should undoubtedly be open to legal processes and banned from future ditrectorships under certain circumstances. In Germany, they can be relieved of duty when in office, signifying tyhat the healthof the company is more importantbthan individuals. How many dodgy UK companies go bankrupt, leaving a trail of bad jobs, customers and suppliers whose money has often been effectively stolen, and re-emerge with the same directors a few months later, and do the same thing , time and time again?.

    In my view, in Councils, it is far better for the local authority “oil tanker” to be steered by a group of wise navigators in a wise course, avoiding rocks and icebergs that are known to exist over the horizon. Realism is needed when it comes to local authority enterprses, and proper procurement. But external sanctions and bodies should exist, with powers.

    Bring back the Standards Board, District Auditor and Audit Commission.
    I think there is a case for a set of national standards for conduct in public office. No major political party has been exempt from examples of bad conduct.

  3. Stanley Lowy says:

    Just incompetence, not-up-to-the-job, failure to understand advice, not having the necessary skills, ignoring local opinion are not reasons for criminal charges or misdemeanors in public office. We have to accept this and the best way to voice disapproval and rid oneself of less than able political office holders is through the ballot box when we have an opportunity to vote for a Mayor who will be accountable to us the inhabitants of Croydon

    • Lewis White says:

      What was that useful old phrase ? From the frying pan to the fire . Yes, that was it.

      The more I think about it, the more I resent the idea of a directly elected mayor. There might be some good un’s around the UK, but there are also some bad un’s.

      I say– trust in democracy. Vote . Elect your councillor to do things not as political placemen and women. Stand for election.

      Train all councillors in finance , and the business of what ever committee they are allocated–planning, finance, adult and children’s services etc.

      If they don’t know about their subject, they should do– or not be a councillor.

      I am not forgetting that Senior Council officers should also know deeply about their service areas.

      Once upon a time, Planning Chiefs were qualified town planners, engineers were engineers.

      Some time in the 80’s , these people were eliminated through reorganisations, and replaced with generic “managers” (often with superbly Orwellian 1984 type, hyper-inflated titles such as “Strategic Director of Customer Interface and Communication.

      Who said “Kinkering Congs Their Titles Take” ? . Thanks, Revd. Archibald Spooner. Every time I see such cliched titles for senior managers, or read the words “Innovative, vibrant and ground breaking ” and the like, in any local authority publicity my double-speak detection radar switches into active mode, and I am aware that the omens are probably not good.

  4. Dan Kelly says:

    If the councillors and staff involved are members of professional organisations can’t they be reported with a view to striking off ?

    • No in summary as under the HRA a state organ cannot suspend a democratically elected person – leaving this aside if it was allowed the downside would be any unappointed administration or authority had the power to kick out and gag any democratically elected representative we would effectively be in a dictatorship.

      • Dan Kelly says:

        You misunderstood what I wrote! If they have been in breach of their professional bodies’ ethics they they maybe struck of and stopped from using that qualification.

        • Hi Dan
          I am a member of a number of professional bodies but I cannot speak for all. I am also an ex Director and Company Secretary but retired. Usually codes and ethic’s are in relation to their professional membership. So say for instance I am a HR professional and member of the CIPD, unless I beach their code of professional conduct and a complaint is raised they perhaps would not even bother to investigate but even with a sanction of being removed from membership it does not remove my qualification nor if acting on the instructions of my employer cause any issue with employment. Year ago I would have assumed and believed otherwise and this would cause a bar to employment however experience has shown otherwise.
          There are particular professional bodies like the GMC and the Bar that can ban members from practicing for periods of time or life, These cases are due to the fact they have to have a Licence to Practice and again it does not remove the Qualification itself
          I did and do appreciate the point you made and agree in some circumstances this could be appropriate.
          Kind regards

  5. You need to look at the Localism Act of 2011. However this in itself raise an interesting point as the Council can deal with Councillors on particular grounds. What would be the situation where the Cabinet Councillors are actually working in concert with the Council Administration? In this situation there is a clear conflict. However for interest you might want to look at this ruling against a Councillor in Wales under the Localism act.
    Mr Justice Hickinbottom however found that (at 203):

    “if a councillor is guilty of a breach of the Code of Conduct, his re-election does not and cannot act as an absolution for his misconduct… his misconduct may, for example, have comprised of improperly favouring his own constituents”

    and

    “therefore, whilst re-election may be a relevant factor in showing the will of the electorate, whether it is material (and if so the weight to be given to it as a factor) is a matter – just one of many – for the case tribunal to consider.”

    However the Code of Conduct is not all encompassing and it appears there are some gaps between this code and the criminal Laws.
    Leaving that aside with little enforcement from Croydon Council in the Building Code of Conduct and the astounding situation that by appointment of an independent Building Inspector who has no enforcement powers, the Council is somehow also unable therefore to intervene or enforce also.
    So effectively by allowing the appointment of and Independent Inspector, Builders have complete freedom to ignore the code.
    If any person In Croydon Building control wishes to disagree I am happy to provide the emails and evidence.

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