The annual cost of having Croydon officials’ work checked by Whitehall-appointed experts comes to ‘three-quarters of a Negrini’, as KEN LEE reports
The Improvement Panel imposed on Croydon by the Tory government to check that the cash-strapped council is running a tight ship will cost the borough nearly £900,000 over its three-year term, according to documents obtained by Inside Croydon.
The letter of appointment sent to panel chair Tony McArdle and his two colleagues lays out the terms and conditions, and makes it clear that the Council Tax-payers of Croydon will, yet again, be picking up the bill for the careful checking of the work of the borough’s officials and councillors.
Communities Secretary Robert Jenrick yesterday published the findings of a rapid review of the council’s operations, which was highly critical of former council leader Tony Newman and his “controlling” clique of senior councillors, who between them even forced officials to alter reports in order to disguise the financial problems facing the borough.
The Improvement and Assurance Panel, to give it its full title, is in place to ensure that nothing like that happens in future.
The appointment letter, sent by Catherine Frances, a senior mandarin at the Ministry of Housing, Communities and Local Government, puts McArdle and his colleagues, Margaret Lee and Phil Brookes, on a pay rate from £600 to as much as £800 per day. That’s the same rate as is paid to Katherine Kerswell, the council’s interim chief executive.
The three panel members could work on Croydon matters for anything up to 120 days each per year – potentially bringing the annual bill to £288,000. Plus, they are to receive travel, accommodation and subsistence expenses.
“Any costs associated with the panel,” Frances writes, “will be met by the London Borough of Croydon.”
The high cost of such scrutiny is, as a Katharine Street source said today, “Three-quarters of a Negrini!”
The source added, “Put that way, for three people, that’s probably not bad value for the tax-payers. They probably won’t turn out to be quite as expensive over the long term as the borough’s ex-chief executive proved to be either.”
The appointment letter confirmed McArdle as the chair of the panel, and identified his colleagues publicly for the first time.
McArdle was chief executive officer at Lincolnshire County Council for 13 years, but has been better known recently for being the lead commissioner appointed by MHCLG in 2018 to re-organise Northamptonshire. Before Croydon ran up the white flag last November, Northants had been the only local authority in 20 years to go bust and issue a Section 114 notice.
Both of the other panel members also have recent experience of conducting reviews of failing local authorities.
Brookes served on the rapid review last year into Nottingham City Council’s failed foray into the district heating business. Brookes, described as the panel’s “companies lead”, will be giving a close look at Brick by Brick. According to MHCLG, “He has extensive experience of successfully managing businesses, carrying out major infrastructure renewal and maintenance programmes across a number of sectors.”
While Brookes is looking into Croydon’s companies, Lee will be checking out the council’s finances.
Like McArdle, Lee had a role in fixing Northants’ broken finances.
Lee has had a 25-year career at Essex County Council, where she works as director of corporate and customer services, but where she was finance director and Section 151 officer for 12 years until July 2019. An adviser to the Local Government Association, she has also worked with MHCLG on reforming business rates and, significantly, is co-chairing a CIPFA panel that is drawing up “a new code of practice for financial management and planning to improve financial resilience”.
Notably, none of the trio appears to have any direct experience of working with the nuts and bolts of a London borough council, or within the broader politics of the capital.
It is understood, too, that the panel is missing at least one key member (potentially another £800 per day): someone with experience in working with children’s or adult services. These two areas have been a significant drain on Croydon’s budgets, with the council receiving criticism for not being able to “manage demand”.
With no senior or suitable candidate immediately available, MHCLG clearly felt that they needed to get the panel installed, with Frances noting in her appointment letter, “Membership of the panel is not fixed: it will be assessed and adjusted as necessary as its role evolves in line with developments at the council. At the same time, the panel will seek to work closely with other advisers working with the council, in particular focussing [sic] on those providing support on children’s services and adult social care.”
According to the terms of reference, “The panel will provide advice and challenge to the council alongside assurance to the Secretary of State as the council seeks to improve its strategic financial governance and budgetary control in response to the findings of Chris Woods’ non-statutory review.”
Having had Woods’ rapid review conclude that there was “no credible alternative to the option of capitalisation”, and so therefore recommending allowing Croydon’s bail-out plan, the suits at the MHCLG have effectively given the council another hoop to jump through before they sign-off on any refinancing deal.
McArdle’s terms of reference say that his team will need to give “an initial assessment” of the council’s own improvement plan that was submitted to Whitehall just before Christmas – including the request for a £150million bail-out loan – “by early February 2021”.
McArdle has a deadline of this Friday, February 5, to deliver his first report. Presumably, if he does not recommend granting the bail-out loan, he and his two colleagues won’t be able to be paid their £800 per diem fees.
- Click here for the MHCLG’s Rapid Review report
- Click here for the panel’s appointment letter and terms of reference
Read more: ‘There is no alternative’: £25m council bail-out given green light
Read more: Council forced to declare itself bankrupt
Read more: Officials to investigate possible wrong-doing at council
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How about an element of performance related pay as part of the packages? I am concerned that they might just conclude that there is no solution to the problems without a major and continuing increase in Council Tax or government grant funding.
The day rates probably are not out of line. It would be nice (but unlikely) to see a gesture from members of Newman’s clique towards this cost. Maybe, just maybe, those doing so might just be able to admit their fault. Then I woke up!
You’re right, the fees are not out of line with the amounts paid to chief execs or consultants, something Croydon has shown itself to be very keen to do, under whatever political group has control of the Town Hall.
But they might be out of line when you consider the 500-plus jobs, mostly of frontline workers, that have been cut as a consequence of the past mismanagement.
And they might also be out of line when you consider that, even with the sky-high executive salaries, the average wage paid to those working at Croydon Council is just £22,000 – or about 84 quid per day.
Which is exactly why Newman and his clique should be making a financial gesture, not a two-fingered one!
This is a case of the council paying the market rate for someone on a short term contract with that level of experience.
Let’s hope they provide value for money.
What an absolute mess Croydon Council is in. I guess we will all be paying for it in increased council tax bills for the next ten years or so, it really is so unfair that they have squandered all this money and just waltzed away into the sunset, some with a big golden handshake.