CROYDON IN CRISIS: Government minister expresses concerns over the changes being made at council as it implements its ‘extremely challenging’ budget. By STEVEN DOWNES
Croydon Council “are at a critical point of their recovery journey and there is more to be done”, according to a government minister who has today rubber-stamped the latest £50million instalment on the bail-out package announced a year ago.
Kemi Badenoch, the Minister of State at the Department for Levelling Up, Housing and Communities, was responding to the latest report from the improvement panel which was appointed by Whitehall 12 months ago to oversee the work of the council when the record £120million government loan was originally approved.
The first £70million of the bail-out covered 2020-2021, the financial year when Croydon went bust. Today’s budget meetings at the Town Hall were postponed by a week while awaiting Badenoch’s formal approval for the £50million for 2021-2022. Badenoch today also gave “an in-principle agreement to £25million of capitalisation support for 2022-2023”.
The council is only able to deliver a “balanced budget” because of that infusion of government loans, which will all have to be repaid by the borough’s long-suffering Council Tax-payers.
The improvement board’s report describes the budget being debated by the council tonight as “extremely challenging”.
Badenoch’s response is about a month later than might have been expected, and forms the government’s reply to the improvement board’s fourth quarterly report, which the Department for Levelling Down has had since December 7.
The 14-page report from improvement panel chair Tony McArdle and his team of Margaret Lee, Phil Brookes and Jon Wilson was drafted before the full horrors of the £73million of Housing Revenue Account money being used on general fund expenditure became public.
The council’s still unapproved accounts for 2019-2020 warranted only a passing reference by McArdle’s panel in December – “We understand the last issue relating to accounting for Croydon Affordable Homes should be resolved in the near future”, they said then. Their view may have changed markedly by the time they wrote their latest report last month.
As far as Badenoch is concerned, the Fairfield Halls fiasco, now the subject of a possible fraud investigation, is bad enough.
“The recent publication of the Report in the Public Interest by external auditors Grant Thornton into the historic governance and financial failings at Fairfield Halls is a concerning reminder of… past failings,” she wrote, with more than a hint of rapidly waning patience with Croydon’s clusterfuck of a council.
“A high level of assurance is essential to make sure that the council continues to make the necessary improvements. My expectation is that the council will continue to engage and work constructively with the panel to ensure that progress does not stall, particularly in light of the forthcoming mayoral elections in May.
“A failure to do so would be of extreme concern and could lead to a reconsideration of whether a statutory approach might be more suitable to secure the improvements that are required.”
By a “statutory approach”, Badenoch means kicking the council officials and councillors out, and instead having Whitehall appointees take over the failed local authority, the threat of which still hangs over the council even as if flogs off more public property and tonight is expected to pass measures which will further reduce the council’s spending by tens of millions.
McArdle’s team’s report refers to “difficulties that we have sometimes experienced in obtaining the information that we need in order to able to offer our advice in a timely manner”, but they are otherwise largely positive about the work which the council has done since its financial collapse in November 2020.
The report mentions the “shock” caused by the scandal of the housing conditions in Regina Road, which they say uncovered “hitherto unknown systemic, critical failures in [the council’s] housing service”.
They write, “The council has essentially made progress on three broad fronts. First, it has stopped making poor, opaque and expensive decisions that were unsupported by sound evidence or by feasible business plans. Given the history of the past few years and which precipitated the crisis, the absence of such failings is worthy of remark.
“Secondly, the council has accepted that it must radically reform to adopt modern business processes, embed sustainable financial disciplines and deliver the right outcomes for its residents.
“Tough decisions will have to be taken in order to make that reform possible.
“Finally, the council has begun the task of making changes to its culture, financial planning and operational procedures to provide a route into this reform.
“All of those things are creditable, but they are not outcomes in themselves. We have consistently observed that the task of recovery would become harder before it could become easier.
“One year in, we are at a point where things are indeed becoming harder.”
Read more: ‘We’re not teetering on the brink of bankruptcy’ claims Kerswell
Read more: Council admits: We’re on the brink of bankruptcy. Again
Read more: Fairfield Halls’ £70m fiasco: ‘BxB didn’t know what it was doing’
Read more: Council faces new storm over ‘missing’ £73m housing money
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