CROYDON IN CRISIS: Has the council leader made another meaningless promise to the borough’s residents over ‘disciplinary action’ against those responsible for the Town Hall’s financial collapse? By STEVEN DOWNES
Penn-ed in: Council leader Hamida Ali
The potentially dynamite but still unpublished Penn Report into possible wrong-doing at cash-strapped Croydon Council, which brought about the suspensions several executive directors as well as the resignations of the former leader and his cabinet member for finance, will be made public but only once all disciplinary matters have been concluded, according to Hamida Ali, the Town Hall leader.
Ali’s pledge to go public with the report into what caused Croydon’s financial crash last year is made in an interview with the Municipal Journal, which reports that council staff “have spoken privately about a ‘collusive, very unhealthy culture,’ with reports of bullying, and lots of claims of race discrimination, nepotism and cronyism”.
The Penn Report was commissioned through the Local Government Association in November 2020 and was delivered to the council’s CEO, Katherine Kerswell, eight months ago. Since when, nothing has been seen nor heard of it outside the council offices at Fisher’s Folly, except for some feeble grumblings and threats of legal action from Tony Newman, the discredited former council leader.
Ali’s claimed “intention” to publish the Penn Report could yet prove to be another empty promise from the Labour-controlled council, however.
Of the five council executives who were effectively hoicked out of their jobs in February – all of whom remaining on their six-figure salaries while they were suspended or on long-term sick leave – only one remains as a council employee and subject to disciplinary action.
Tony Newman: still suspended by the Labour Party
Four – Guy Van Dichele, Lisa Taylor, Shifa Mustafa and Jacqueline Harris-Baker – have since resigned, with Van Dichele even pursuing legal action against the council for constructive dismissal.
Newman and another ex-councillor, Simon Hall, had their memberships of the Labour Party placed in “administrative suspension” as a consequence of the findings in Richard Penn’s report. According to the Labour Party last month, the duo remain suspended pending inquiries.
Which just leaves one individual who might still be subject to any internal disciplinary action.
Hazel Simmonds, the executive director for “Gateway, strategy and engagement”, who oversaw housing, communications and the council’s Gateway welfare service, remains on gardening leave, her role within the council yet to be determined.
Those who have left council jobs – including the notorious ex-CEO Jo “Negreedy” Negrini – or who have resigned as councillors might still be subject to legal action, however, with the offence of misconduct in public office suggested by one Katharine Street source as a possible route.
Hazel Simmonds: still on gardening leave
This, though, would require action to be taken by public prosecutors and the police, and they would need to respond to a formal complaint. Obtaining a conviction is notoriously difficult. Misconduct in public offence carries a maximum sentence of life imprisonment.
According to the Crown Prosecution Service, misconduct in public office is “committed when the office-holder acts (or fails to act) in a way that constitutes a breach of the duties of that office”.
These are defined as when a public officer “wilfully neglects to perform his duty and/or wilfully misconducts himself to such a degree as to amount to an abuse of the public’s trust in the office holder without reasonable excuse or justification”.
The “abuse of the public’s trust”, if any prosecution is ever brought over the events in and around Fisher’s Folly these past seven years or so, could provide for some fascinating legal arguments, as during the Municipal Journal interview, Councillor Ali and Katherine Kerswell, the council’s new chief exec, are said to “reveal they have spent a lot of time listening to and ‘re-earning the trust’,” of the council’s “passionate staff”. Those are our italics, just in case the judges in a court case might miss them.
Jo Negrini: some employees were ‘traumatised by the culture’ when she was council CEO
The author of the article, the MJ‘s news editor, Dan Peters, writes that council staff “still want accountability for who led the council to its downfall and who took the decisions that damaged Croydon’s reputation”.
Peters writes, “It’s already clear that culture was a big contributor to the council’s dysfunction.
“Croydon had internal control systems, a risk management framework and governance models but it also had a culture that said those things actually didn’t matter.”
Peters also notes that he had heard “reports of senior managers being unable to sleep the night before key meetings”.
The magazine reports, “Some employees have been left traumatised by the culture.”
The interview goes on to reveal that some aspects of that toxic culture – blame-shifting and passing the buck – may not have gone away entirely. When asked about Brick by Brick, the council-owned loss-making house-builders whose failure helped torpedo the Town Hall budgets, Ali’s answer was to state that, “All the challenges in relation to Brick by Brick are about its execution.”
Which, as far as it goes, is an accurate assessment.
Brick by Brick’s management was, fundamentally, useless. But Ali’s analysis overlooks the fact that she was herself a part of the council cabinet under Newman from 2016, the same cabal that appointed council staffer Colm Lacey as Brick by Brick’s CEO and which failed to keep a check on the company’s “challenges” and woeful “execution”.
According to the magazine interview, Ali is now saying that she was becoming “increasingly concerned and curious about our financial situation” before the setting of the 2019-2020 council budget. Just a shame that she never mentioned anything publicly at the time.
It was around three years ago that the spending of tens of millions of pounds to rectify the borough’s Ofsted-failed children’s services and the lack of returns on the £200million investment in Brick by Brick was already obvious, even to outsiders. Ali said nothing about the impending crisis until… well, after Newman jumped ship before the auditors’ Report In The Public Interest was released in October 2020.
That Grant Thornton RIPI made Newman’s position untenable, and there are those among Ali’s Labour colleagues at the Town Hall who maintain that had they been asked to select a new leader in the days after the RIPI was released, rather just hours before it was made public, neither Ali nor any member of Newman’s cabinet could possibly have been appointed to the top job.
Ali told the trade magazine that, “now as leader, she makes decisions by consensus”, although that includes decisions made within the Town Hall Labour group which still contains a handful of influential councillors who for six years were part of Newman’s “controlling” clique.
In the coming months, Ali and her not-so-new cabinet will face two tests at the ballot box. The first comes next month with a referendum over the issue of a directly elected mayor – Ali and the Labour group have decided to support sticking with the current failed system, even to the extent of effectively deselecting one councillor who dared take a different point of view.
All indicators right now suggest that those Croydon residents who bother to turn out on October 7 will vote in favour of a directly elected mayor, and then at the local elections next May, the Conservatives will regain control of the Town Hall. The Tories will find themselves two years into a three-year financial restructuring of the borough, with government-appointed commissioners looking over their shoulder.
“I think we’ve made major progress,” Hamida Ali told the Municipal Journal last month, “but there’s a huge amount still to do.” And she will have known that those further tasks will fall to someone else.
Read more: The Kerswell cull begins: five senior council execs go ‘off-grid’
Read more: Officials to investigate possible wrong-doing at council
Read more: Council forced to declare itself bankrupt
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What does it require to make a formal complaint?
Don’t the police have an obligation to investigate anyway, and see the Penn report?
It would be very convenient to the administration if the publication is delayed until AFTER the referendum on Oct 7th.
I am sure that this is not lost of the leaders.