CROYDON IN CRISIS: A report from commissioners overseeing another local authority that went bankrupt offers troubling parallels closer to home.
STEVEN DOWNES reports
Croydon Council can get itself out of financial trouble – but only if Whitehall stumps up another £30million in bail-out cash.
That’s according to Tony McArdle, the government-appointed chair of the council’s improvement board.
McArdle was interviewed by the Local Government Chronicle about his role in the winding up of Northamptonshire County Council, the Conservative-controlled local authority that went bust in 2018 – two years before Croydon’s financial collapse, and without the excuse of covid-19.
McArdle has been working as a co-commissioner in Northants for the past three years, overseeing the breaking up of the council into new bodies, and this week he delivered his final report to government. McArdle’s findings on the multi-million-pound errors and poor judgement shown in the Midlands have uncanny parallels to many of the situations he has encountered since being called in to deal with the troubled south London council.
So far, Croydon has been granted £120million from the Ministry of Housing, Communities and Local Government – the biggest bail-out ever to a local authority in Britain. The total is made up of £70million used in the last financial year to balance the covid-hit budget, and £50million to see the council through the 2021-2022 financial year.
Katherine Kerswell: the £120m bail-out is not enough
When Katherine Kerswell, the council’s chief exec, and council leader Hamida Ali presented their begging bowl to MHCLG late last year, they also asked for £25million for 2022-2023, with a final £5million for 2023-2024.
“We were told ‘Yes’ to the £70million and £50million,” a senior Town Hall source told Inside Croydon today, “but then told that the remaining £25million and £5million sat outside the comprehensive spending review period so we would have to wait for a decision after the review.”
According to McArdle, Croydon “cannot become a full functioning local authority again without more government support”, the Local Government Chronicle reports.
“But then they should be able to recover within that funding package,” McArdle said.
The magazine report continues: “There are clearly similarities between how Northamptonshire and Croydon both came to find themselves facing a financial abyss, and while both authorities were ultimately guilty of their own undoing, austerity – made worse in Croydon’s case by coronavirus-induced financial woes – also played a role.”
McArdle refers to a lack of “self-awareness” that he found while poring over Northamptonshire’s books and encountered again when dealing with the shambles at Fisher’s Folly.
According to McArdle, Croydon Council had been “unaware that what they were doing was leading to their collapse”.
He said, “They have learnt that [self-awareness] and for officers to challenge one another.
“Putting it right will be a considerable task.”
Tony McArdle: “considerbale task”
Northamptonshire was the first local authority in England in 20 years to issue a Section 114 notice, an admission that it was unable to deliver a balanced budget. This saw the government step in to take control of the authority ut of the hands of elected councillors and the council’s officials, appointing McArdle and Brian Roberts as commissioners.
Yesterday, what is probably McArdle and Roberts’ final public report on Northamptonshire was published by MHCLG.
The LGC describes the report as “a no holds-barred exposé of what went wrong”.
McArdle said, “We felt it entirely reasonable that taxpayers should be informed as to how the council had got itself into this situation and the sector as a whole advised as to how such a failure could be avoided in the future.”
It is suggested that the commissioners felt such a report was necessary because Northamptonshire’s auditors opted not to issue a Report In The Public Interest. In Croydon, Grant Thornton, the council’s external auditors, issued a RIPI last October, a significant step in bringing about the resignation of council leader Tony Newman and his cabinet member for finance, Simon Hall.
The Fairfield Halls: an auditors’ report into how the £30m refurbishment has cost £70m has not been made public
And according to McArdle, just as in Croydon, much of Northamptonshire’s problems stemmed from an inadequate rating from Ofsted on their children’s services department. In Northants, that Ofsted report came in 2013. Croydon’s children’s services were rated inadequate in 2017.
By throwing cash at their failed children’s services department, when there was no “effective plan in place to use this funding wisely”, other services in Northants were “starved of resources” to the point when they “almost ceased to exist”.
“This led to an ever-worsening, inefficient position within children’s services while also leaving other services unable to properly fulfil core functions,” McArdle says in his report. In Northamptonshire, the role of children’s services was passed to an independent trust last year.
There will be other elements of the Northants experience that are all-too-familiar to those who have observed events in and around Fisher’s Folly.
There was the “preocccupation with far-fetched experiments and ill-thought-through exotic solutions”.
The commissioners’ recommendations include that councils should not be “led by trend or fashion”, and that they should ensure that “robust and equitable” contracts are in place with service partners. Northamptonshire’s over-reliance on outsourcing its services is heavily criticised, with that council being described as “dangerously under-governed”.
Poor value PFI contracts are also highlighted. “Millions of pounds of public money have been wasted because of the poor construction of the contract and the council’s inability to hold the contractor firmly enough to account.”
After 132 years, Northamptonshire County Council ceased to exist on March 31 this year. Now he is working in Croydon, every day must be a Groundhog Day for McArdle.
Read more: Croydon Council handed biggest bail-out ever
Read more: £30m Fairfield Halls project never went to competitive tender
Read more: ‘Not good enough’ chair of scrutiny could yet stay in post
Read more: A level of ineptitude which would be tolerated nowhere else
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“Millions of pounds of public money have been wasted because of the poor construction of the contract and the council’s inability to hold the contractor firmly enough to account.”
Both Labour and Conservative councillors have shown themselves to be neither willing nor able to hold contractors to account, even when it’s not some nebulous multinational conglomerate that’s running rings around them (Veolia), but council employees.
The proof? Check the selfies Tweeted by election candidates past and no doubt future, going litter picking on Croydon’s streets and in its parks. With their grabbers, tabards and bin bags, they’re not virtue signalling. They’re donning an idiot’s uniform and displaying their failure to grasp the fact that taxpayers’ money is being paid to companies to, er, keep the streets and parks litter free.
The only people impressed by these ludicrous antics are themselves and anyone dim enough to swallow this piss poor propaganda.
Competent councillors would kick the arses of contractors, whether outsourced and inhouse, who failed to deliver what they’re paid to. Why is our Town Hall a magnet for incompetents?
The true answer is that Croydon senior management, the ineffective Tory opposition and clueless Labour councillors all proved the Peter Principle is correct.
It was a perfect storm where a decade of austerity, Covid and a bunch of people promoted to their level of incompetence collided. Not just happening in Croydon, look at Westminster ffs
Up to a point Brian, With Croydon Labour, we can point to sheer incompetence, something they have in common with Croydon Conservatives.
With the Conservatives in government, as a court found today, it’s not incompetence, but is looking a lot like criminality.
In the public sector there doesn’t seem to be any accountability for poor performance. Maybe salaries should be performance related.
Trust me there is and it is quite brutal with people having to apply every two years for their jobs along with unreasonable performance management systems – and in Croydons case huge payments to staff sacked to cut costs at least until you reach a certain level. At that stage to get the top roles you have to follow the Political will of the establishment and take the heat as a scapegoat – thence the 6 figure payoff’s. And then look where they turn up.
The simple way to break this is to ban compromise agreements and silence payments. A person does wrong they should be banned from holding office for two years minimum anywhere in the UK. Set up a standing enquiry panel for all local government that has power to take documents and statements under oath and allow public and press in to witness.
No matter the amount of money it will make little difference. To ignore sound fiscal and legal advice and still not break a law displays some acumen for avoidance.
But It is then difficult to claim incompetence at the same time as being clever enough to avoid breaching laws whilst ”arranging” those contracts and loans.
Does anyone think that even the current executive team are doing things in Croydon residents’ best interests – seriously?