CROYDON IN CRISIS: Political editor WALTER CRONXITE finds that the era of half-million-pound rewards for failure might not be over at the council just yet
Those council exec directors on six-figure salaries who are sweating on the outcome of a possible disciplinary process at a couple of committee meetings later this week might be a bit less concerned than previously, after the government scrapped its £95,000 cap on public sector “golden handshakes”.
But now the government has backed down on its attempt to block such egregious misuse of public money on “payments for failure”, after a court action by trade unions.
Last week, four executive directors at the council – Guy Van Dichele, Lisa Taylor, Hazel Simmonds and Shifa Mustafa – were summarily suspended, pending an investigation into their conduct in the months that led to the council financial crisis. A fifth, Jacqueline Harris-Baker, is expected also to be suspended from her duties, although last week she was on sick leave.
There is an appointments committee meeting on Wednesday afternoon (brought forward from Thursday morning), at which six councillors are asked, “To consider a report of the chief executive” on a “Review of management arrangements”. The report meant to accompany the agenda on this item has not yet been published by the council.
It is widely expected that Katherine Kerswell, the council’s interim CEO, is moving in response to findings in the Penn Report, an investigation conducted before Christmas by Richard Penn, an independent local government and ethics expert recommended by the Local Government Association, into possible wrong-doing at the council.
In the past, when Penn has conducted similar investigations at other local authorities, they have often ended with a parting of the ways for some senior council staff, who have left their jobs with generous packages to ease their departures.
Only a handful of people have had sight of the Penn Report in Croydon so far, which is understood to run to about 100 pages and makes some “alarming” findings.
There has been speculation within the council offices at Fisher’s Folly that Penn’s recommendations could see two or three senior executives leave their jobs, though the financial arrangements now might be a good deal more costly for Croydon’s cash-strapped council than they might have been even a week ago.
At the weekend, a Treasury spokesman told the BBC that the government cap on public sector pay-offs was withdrawn due to “the unintended consequences” it had on employees.
They added that the government remained committed to bringing forward proposals to tackle unjustified exit payments.
The cap came into force in November, with the aim of ensuring exit payments represented value for money and were fair to taxpayers. But public sector workers’ union Unison said that the rules, meant to prevent excessive payments to the highest earners, would hit ordinary workers.
Unison said long-serving public servants earning relatively low salaries of £25,000 a year would have been affected, and welcomed the decision to remove the cap.
Unison general secretary Christina McAnea described the cap as “damaging”, saying it had “threatened to blight the retirement of millions of workers”.
She said, “Through no fault of their own, long-serving staff over the age of 55 and facing redundancy would have been hit by the regulation. Because they’re obliged to take their pensions if they lose their jobs, when combined with redundancy payments, the final amount could have exceeded the £95,000 cap.”
Civil servants and council staff who had been subject to redundancy since November and had their settlements capped at £95,000 will now have their entitlements topped up.
The Tory government has been talking about introducing a cap on pay-offs since 2015. According to government figures, redundancy settlements in the public sector totalled about £6.5billion between 2011-2012 and 2013-2014. More than £1billion of this cost came as a result of exit payments costing more than £100,000, the government said.
The £440,000 paid to Negrini last year is thought to be among the biggest pay-offs in the public sector in 2020, although it may not be the largest.
It has emerged that there are others currently working at Croydon Council who have themselves enjoyed a huge pay-off to entice them to leave a previous job with a local authority: in 2012, Kent County Council decided it no longer needed the services of its “managing director”, and eased them out the door by offering a pay-off of £420,000.
The name of that managing director? None other than Katherine Kerswell, who within a few months of leaving Kent managed to find herself another six-figure salaried job in the public sector, as the director-general for civil service reform at the Cabinet Office. From that position, Kerswell delivered informed articles to the Grauniad about delivering value for money to the public.
“Cost-effectiveness is the hallmark concept for public leaders in these austere times,” Kerswell once said, apparently unaware of any irony, or hypocrisy.
Clearly, many Croydon Council staffers, councillors and residents will be watching the events of this week with an eye on how “cost-effective” Kerswell can be.
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