£700,000: Croydon counting the costs of council failures

CROYDON IN CRISIS: The Town Hall has been hit with ‘penalty fines’ of its own since its financial collapse 12 months ago.


Broke: officials in Fisher’s Folly have been paying high bills as a consequence of the borough’s bankruptcy

And rising…

That’s how much Croydon Council says it has paid so far, or expects to pay, for consultants and expert reports into its financial collapse and the many failures of Brick by Brick. And it may not end there.

The figures have been provided in an answer to a councillor question, and cover the punitive costs of the government-imposed “improvement and assurance panel” imposed on the borough through to 2024, as well as work from auditors Grant Thornton and consultants Price Waterhouse Coopers for their efforts towards untangling the financial mess caused by the council’s loss-making house-builders.

It all represents possibly the biggest bill for an exercise in public self-flagellation ever paid in south London.

The formal response, on behalf of council leader Hamida Ali, suggests that there are other bills still to pay, all arising from the mismanagement of the Labour-run council administration, of which she had been a part since 2016.

The questions were put by Robert Canning, the Waddon ward Labour councillor who decided some time ago that he would not be standing at next May’s Town Hall elections.

Not cheap: Tony McArdle and his panel might cost Croydon at least £450,000

For his first question, Canning asked, “How much has been spent by Croydon Council on the improvement and assurance panel set up as part of the Croydon Renewal Plan and what is the ongoing cost to the council of this panel?”

The panel, chaired by Tony McArdle, was appointed in January this year at the instruction of Robert Jenrick, the Secretary of State for Housing, Communities and Local Government, tasked with overseeing the work of Croydon’s officials in keeping within their budgets. The panel is one of the rapidly mounting costs of the council issuing a Section 114 notice in November last year, effectively declaring the borough bankrupt.

According to the poorly drafted and proofed council answer, “£55,000 has been spend [sic] on the panel to date ie. up to the end of May 2021. It is currently envisaged by the MHCLG based on their letter of 18th January that the panel will need to continue till March 2024.

“The costs for the rest of the financial year are envisaged to be £186,000 with a further £223,000 required for the following two financial years.”

McArdle and his team might want to ask the Croydon number-crunchers for their rough workings on this, because from MHCLG figures, it looks like the council officials have miscalculated once again.

The £55,000 cited in the council response covers the cost of the panel for just four months. The panel, initially comprising McArdle and two colleagues, now numbers four commissioners. The MHCLG appointment letter put them on fees of £600 to £800 each per day.

Questioning: Waddon’s Robert Canning

Now while there is no expectation for all four of them to be looking over the shoulders of staff in Fisher’s Folly for a full five-day week for the next three years, it does seem that the council’s estimate of £223,000 to cover April 2022 to March 2024 might be low-balling things a tad. Oh well…

Canning’s second question asked, “How much did Croydon Council pay its external auditors Grant Thornton for the Report in the Public Interest into the council’s financial situation, decision-making and governance published on 23 October 2020?”

The RIPI was the first independent delve into the financial distress of the council, and Grant Thornton’s auditors were severe in their criticism of the council’s lack of scrutiny and oversight of its accounts.

The report appeared soon after Hamida Ali, a member of the cabinet under discredited former leader Tony Newman since 2016, was elected by her Labour councillor colleagues as their new leader.

More than one Labour councillor has admitted to Inside Croydon that had they known the extent of the RIPI’s findings before the leadership selection, then none of those who had been in Newman’s cabinet might have won their support. They suggest that the leadership decision was rushed through before the full horrors of the RIPI were shared with backbenchers and the public.

“The council has been charged £65,000 for the October 2020 Report in the Public
Interest by Grant Thornton,” was the formal response to Canning’s question.

Gang show: Hamida Ali (second left) was part of the clique under Tony Newman (left) for six years

In answer to a supplementary from Canning asking what has been paid for Grant Thornton’s “additional work undertaken over and above its standard auditing work”, meaning principally the long-delayed review into the Fairfield Halls’ “£70million fiasco” (© The Stage), the council says that “this is still being discussed” with the auditors.

For his final question (for now, at least), Canning asked, “How much did Croydon Council pay Price Waterhouse Coopers (PwC) for its independent strategic review of Brick by Brick Croydon Limited and a number of other commercial ventures published on 13 November 2020?

“Please also state the cost to the council of any supplementary work subsequently undertaken by PwC.”

The council answer was brief: “Total cost that has been billed is £168,300.”

Work on unravelling the finances of Brick by Brick is continuing.

Read more: The Audit Report: Leader apologises for six years of misrule
Read more: The Audit Report: ‘Tony Newman always has been a coward’
Read more: The Audit Report: Brick by Brick has paid nothing to council

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About insidecroydon

News, views and analysis about the people of Croydon, their lives and political times in the diverse and most-populated borough in London. Based in Croydon and edited by Steven Downes. To contact us, please email inside.croydon@btinternet.com
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