CROYDON IN CRISIS: Five months after their resignations, two of the key figures in the financial collapse of the council have had their party membership suspended. EXCLUSIVE by STEVEN DOWNES
Tony Newman, a councillor in Croydon since 1994 and leader of the Labour group at the Town Hall for 15 years until his resignation last October, has been suspended by the Labour Party.
An “administrative suspension”, as it is referred to by the press office at the Labour Party, has also been applied to Simon Hall, the councillor for New Addington and the cabinet member for finance under Newman’s leadership.
At the time of his resignation as a cabinet member in October, Hall said that he was “proud” of his achievements in the six years since 2014 when he had been in charge of the borough’s finances.
Last month, Newman and Hall gave a joint interview in which they gave no indication that they were prepared to stand down as councillors, and strongly suggested that they would seek re-election in 2022.
Having their party membership suspended, pending an inquiry, does not affect Newman and Hall’s positions as councillors. But they are banned from taking part in Labour Party business, including policy meetings among their erstwhile party colleagues on the council.
The move by the Labour Party comes just a couple of days after Croydon Council suspended four executive directors – Lisa Taylor, Shifa Mustafa, Hazel Simmonds and Guy van Dichele – from their jobs. Katharine Street sources suggest that a fifth exec, Jacqueline Harris-Baker, the borough solicitor, may also be suspended once she returns from being on sick leave.
Hall and Newman resigned from their council leadership positions in October, just days before the council auditors, Grant Thornton, published a Report In The Public Interest which was hugely critical of the way in which the council, and its finances, had been managed while the pair had been in charge.
Newman was found to have authorised £100million-worth of council borrowing, towards the purchase of the Croydon Park Hotel and other commercial properties, without going through the proper Town Hall processes.
In November, the council was forced to issue a Section 114 notice, unable to balance its budget, in part because of the “risk” that council-owned building company Brick by Brick would fail to pay over £36million this year in loan repayments, interest owed and profits.
The council is currently in the process of laying off hundreds of staff and axing dozens of services to residents in an effort to balance its books.
Last week, another report, this time commissioned by the government, identified Newman and “… an inner circle of a small number of cabinet members who have been very controlling in their management of the council and its finances”.
The report, following a rapid review commissioned by local government minister Robert Jenrick, found that “council officials were instructed by members of Newman’s cabinet to rewrite some of their reports, in effect to disguise the council’s mounting financial problems”.
And the report’s author, Chris Wood, wrote, “It is clear that in recent history Croydon Council has failed to manage its finances adequately in many… areas. It is a council that is said to be unfamiliar with taking and implementing difficult financial decisions and as a consequence it has engendered a culture of poor budget management and poor financial control.”
A further report, into possible wrong-doing at the council, has not yet been published, but it is understood it may be a topic for discussion at a meeting tonight of the ethics committee (yes, Croydon has an ethics committee, even if it has little grasp of what ethics are). Both Newman and Hall are understood to have been among the 40 councillors and council staffers who were interviewed by the Local Government Association’s Richard Penn for the report.
Despite the mounting criticism of Newman and Hall’s running of Croydon Council, in the absence of a District Auditor – a position swept away in the Localism Act “reforms” of Eric Pickles 10 years ago – it appears that the only way in which disciplinary action might be taken against councillors found to have acted improperly or illegally, short of a criminal investigation, is by having their party whip removed.
As one careful Katharine Street source said today, “It will be said that there has been significant incompetence, mismanagement, failures of diligence and poor governance. But as to unlawfulness, there is mere suspicion.
“The possibility that the suspicion is justified remains, as is often the case with suspicion, but unlawfulness has not yet been evidenced.”
Newman did not respond to Inside Croydon’s invitation to comment on his position by the time of publication.
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