CROYDON IN CRISIS: Back-to-back meetings yesterday pushed through the paperwork to balance the books and increase Council Tax. But Hamida Ali’s administration cannot shake off its part in the borough’s financial calamity. By WALTER CRONXITE, political editor
With the £120million bail-out cash on its way, Croydon’s Labour-controlled council has been able to balance its books for the coming financial year, passing its budget last night as the borough’s councillors indulged in a bit of role-reversal.
After spending their political lives trying to “shrink the state” and applauding the inherent callousness of “there’s no such thing as society”, Croydon’s Conservatives found themselves arguing against the massive cuts in services that were put forward in the cash-strapped council’s budget for 2021-2022.
Having voted in favour of the Labour Town Hall budgets in the two years immediately before the council’s financial collapse, Jason Cummings and his Conservative cohort weren’t going to be making that mistake again. Oh no. So Croydon’s Tories last night duly voted against the council budget that had been approved by the Conservative government.
This was Punch and Judy politics meets the Theatre of the Absurd, with a bit of Magic Circle rabbits-out-of-a-hat thrown in for good measure.
Council leader Hamida Ali’s Labour group had enough votes for a comfortable majority at the end of a long day of back-to-back meetings, even without the help of the two disembodied voices from what was described at the start of last night’s session as “independent Labour” councillors.
Croydon has been a political duopoly for decades. Suddenly, this virtual Town Hall meeting was populated by a third group. The Tories claimed to be shocked.
Asked to identify who these mystery figures were, (ceremonial) Mayor Maddie Hansen refused. Yet the duo were unmasked by a council officer a little while later when they were called forward to vote: Simon Hall and Tony Newman.
Like Banquo’s ghost, they turned up to spoil the party, their presence a constant reminder of how Croydon Council had got into this mess. Newman, the discredited council leader, and Hall, his long-time cabinet member for finance, sat in silence for two and half hours until the vote, but everyone knew they were there.
Although suspended by the Labour Party last month, both continue as councillors. And both were allowed to vote on the harsh financial measures which their crass misjudgements and questionable conduct had made necessary. The Conservatives outrage on this appeared genuine, and justified.
In the cabinet meeting earlier in the day, the groundwork was laid for the evening’s debates. Chris Buss, the former senior official at Tory-controlled Wandsworth who was brought in as a consultant to sort out the mess that is Brick by Brick, has – almost in a magician’s puff of smoke – been transformed into Croydon’s director of finance, filling a vacancy left by Lisa Taylor’s abrupt departure.
Buss is clearly a figure much to the liking of the Tory government and the civil servants at the Ministry of Housing, Communities and Local Government who rubber-stamped the rescue package for Croydon that came through late on Friday. Without the government’s permission to borrow £70million for 2020-2021 and £50million for 2021-2022, Croydon Council may have ceased to exist in its current form.
Armed with the extra cash, “Magic” Buss was able to reveal that the previously bankrupt borough would now have reserves: the minimal £7million which had existed in previous accounts, to which he was adding £20million now and £10million next year. The council had ignored auditors’ repeated warnings about its inadequate reserves; now Buss would be targeting a reserve of at least £50million, enough to see Croydon through the rainiest of days.
Croydon Council’s new budget is the consequence of a year of covid-19 spending on top of a decade of Tory austerity.
The escapology that Buss is conducting for the council is also beginning to appear to be down to the magic of numbers…
The council’s accounts for 2019-2020, still yet to be signed off, are not a problem, according to Buss. “There are other local authorities which have accounts from two or three years ago that have not been signed off,” he assured. “It’s not a problem. Unlike commercial organisations, there’s no penalties for local authorities.”
A couple of weeks ago, Buss had startled some council figures when he revealed that, on top of the council’s £66million overspend on coronavirus, another £30million that Croydon didn’t have had been spent in the first three months of 2021.
Yesterday, there was another puff of smoke. That £96million overspend suddenly vanished, and the total figure, Buss assured, was a less intimidating £70million. With a wave of his wand, numbers from one column had been moved into another, and all was well with the world.
The extra 1 per cent interest that the government was adding to the borrowing rate on the £120million loans? Not a problem, Buss said, pulling another rabbit out of the hat. “We were aware that would likely be a condition,” he said. The additional costs, reckoned to be £24million over 20 years, had already been factored into the proposed budget already – as if it had always been a foregone conclusion.
Buss’s biggest trick could yet be to unravel the £60million mess that is Brick by Brick’s bungled refurbishment of the Fairfield Halls. He’s saving that, though, for an encore performance once auditors Grant Thornton have their report fact-checked.
The cabinet meeting was an echo chamber of quiet self-congratulation, as one after another, Labour councillors patted themselves on the back for what a fine job they had done. Not a single Conservative councillor was called by Hamida Ali to speak until one hour 23 minutes into the meeting.
The Tories would get more of a say in the evening’s full council meeting, when their attack lines were clear from the start.
Would, asked Jason Cummings, the Tories’ deputy leader, the council be implementing all the recommendations of the government’s rapid review?
Cummings’ technique for these meetings is to try to lay a trap with a seemingly innocent question which is then sprung with his supplementary. So when Hamida Ali assured him that of course they would be following the government recommendations, Cummings piled in to ask why nothing had been done yet to replace the Labour councillor chairing the General Purposes and Audit Committee with “a chair from outside the majority group”, as the rapid review had required.
For most people, “from outside the majority group” would mean someone from the Town Hall’s minority group, the Tories. Not according to Hamida Ali, who revealed that legal advice was being taken to appoint an “independent” chair.
Ali usually has a calm demeanour in these meetings, though there was more than a sense of rising anger as what she described as “a significant moment” – the history-making record bail-out – was being undermined by “rather alarmist” Tory interpretations of the many and deep cuts in spending being proposed.
Jeet Bains asked her why she had not resigned: she had been part of Newman’s inner cabinet for five years, even deputy cabinet member for finance at one point. Most of her own cabinet had also been part of the ex-leader’s leadership team.
Her cabinet, Ali claimed, as she tried to distance herself from her own past, was “new leadership”.
The Tories were guilty of “ongoing hypocrisy”, according to Ali, who accused the opposition of “potentially misleading residents” simply by detailing the cuts in her budget.
“This,” said Tory councillor Andy Stranack, “is the council of cuts.”
He then asked, “Are residents still safe living in Croydon with these cuts?”
Stuart King, Hamida Ali’s deputy and the cabinet member in charge of pulling together the council’s recovery plan, was the voice of reason when he admitted that “a lack of financial discipline” had been at the core of the problems stacked up by Newman’s administration.
“At least we’re getting honest accounts this year,” Tory Lynne Hale said, seemingly a little more assured.
“These are difficult but necessary decisions,” King said, in the night’s other bit of role-reversal, the Labour councillor adopting the rhetoric you might expect of a cuts-happy Conservative.
“The single biggest threat we face is covid,” King continued. He predicted yet more increased demand on the council’s services and stretched finances as the full economic impact of the year-long pandemic begins to emerge, with the ending of the furlough scheme, the end of the ban on tenant evictions and other government relief schemes.
Having targeted Karen Jewitt and her job as the chair of GPAC, Cummings and accomplices Vidhi Mohan and Ian Parker, now turned their fire on Sean Fitzsimons, the chair of the scrutiny committee which had also been subject to criticism from government-appointed inspectors.
It was “scandalous” that Fitzsimons had not resigned, Cummings said. Under repeated attacks from Parker – “Do the honourable thing!” – Fitzsimons looked rattled and started trading narky insults.
Hale questioned why Newman and Hall, plus the fellow members of their old cabal, Alison Butler and Paul Scott, were being allowed to participate in a budget-setting meeting. “The government wouldn’t trust you to go to the corner shop to buy a bag of toffees without having a responsible adult in tow,” she said.
Now, the four councillors who had been at the centre of the decisions which led to the council’s financial collapse would be “allowed to vote for Croydon residents to pick up the bill for their failures”.
The Conservatives’ calls for sackings and resignations managed to avoid one fundamental issue that will soon confront the borough’s Tories: the financial recovery of the council is not going to be achieved quickly, and whoever wins the 2022 local elections will have to preside over years more of cut-backs.
The “detached” Andrew Pelling, given a rare opportunity to speak at a council meeting, highlighted how the Tories had voted in favour of the last two council budgets, and that in the past they had presented their own, alternative budget proposals. “If you’re looking to get elected in 2022, you need to show what you would do,” he said.
Describing the £24million additional interest charge as “a Tory tax” on the people of Croydon, Pelling said, “Winning back trust will be a tough task.”
And King, too, challenged the Tories to come up with more than political point-scoring. Saying that the council is “only in the foothills” of its recovery, King highlighted the dilemma: “The Tories oppose millions of cuts.
“It is dishonest not to be open about how you would balance the books.”
Read more: Council Tax-payers pay for politicians’ game of cat-and-mouse
Read more: Croydon In Crisis: Council handed biggest bail-out ever
Read more: 28% – Newman leaves his Council Tax legacy to Croydon
Read more: ‘Not good enough’ chair of scrutiny could yet stay in post
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