CROYDON IN CRISIS: The council has been issued a final warning today, with the threat of commissioners being sent in to take over the running of the borough
Robert Jenrick, the Local Government Secretary, has today announced measures to address “the serious failures at Croydon Council”, after publishing the findings of the rapid review team he sent in to Fisher’s Folly in October.
Significantly, for the council’s present leadership, the rapid review team’s recommendations include that Jenrick should approve Croydon’s capitalisation directive – effectively be allowed a multi-million-pound bail-out.
Perhaps unsurprisingly, the findings of the rapid review, conducted by Chris Wood, tallies closely with the Report In Public Interest from auditors Grant Thornton that was published in October, as well as PwC’s findings on Croydon’s commercial companies, and even echoes elements of the council’s own Section 114 notice.
Jenrick’s review team found “significant failings in the leadership and management” which led to the financial collapse of the council, and led to the authority issue a Section 114 notice in November – only the second council to effectively admit it had gone broke in the last 20 years.
According to Jenrick’s Ministry of Housing, Communities and Local Government, the rapid review report “highlighted the council’s poor track record in managing budgets, poorly managed commercial ventures and low levels of reserves which caused significant issues”. Croydon has debts of £1.5billion, and a budget overspend of £66million this financial year.
“The rapid review into Croydon Council found serious failings in governance, financial strategy and commercial investments which have led to taxpayers and residents being severely let down over a number of years,” Jenrick said.
“This must end now, and I have appointed an expert panel to help the council urgently address the issues they face and deliver a comprehensive recovery plan.
“I will be monitoring progress closely and will not hesitate to take further action if necessary.”
MHCLG today confirmed that unless Croydon “demonstrates significant progress”, then a more formal statutory intervention will be considered, including the appointment of commissioners.
Today’s announcement confirmed that Tony McArdle will chair an improvement panel in Croydon. McArdle was the lead commissioner who was appointed when Northamptonshire went bust in 2018. Also on the panel will be Margaret Lee and Phil Brookes.
The trio have been appointed, according to MHCLG, “to support and challenge Croydon’s improvement progress and make regular reports to the Secretary of State”.
Croydon Council, under interim chief exec Katherine Kerswell, submitted a revised bail-out plan to MHCLG just before Christmas, including a request for an immediate £25million to balance the books this year, and a total of £150million to 2024.
“This will be considered alongside the panel’s findings,” MHCLG said.
Read more: ‘There is no alternative’: £25m council bail-out given green light
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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