Secret report into wrong-doing at council still kept under wraps

CROYDON IN CRISIS: Eighteen months after an investigation into how the council’s finances collapsed, the report into the affair – which prompted the resignation of the council leader and four execs – remains unpublished. And the council CEO intends keeping the findings secret until after election day. EXCLUSIVE by STEVEN DOWNES

Keeping us waiting: Tony Newman could feature in the Penn Report

The Penn Report, the investigation into wrong-doing at the council that prompted the abrupt resignations as councillors of Tony Newman and sidekick Simon Hall, the council leader and his cabinet member for finance, as well as four of the Town Hall’s top executives, could be about to be published.

But oh so conveniently for many senior figures at the council, the Penn Report won’t be made public until after the local elections are held on May 5.

Katherine Kerswell, the council CEO, has had a copy of the controversial report, drafted by Local Government Association troubleshooter Richard Penn, sitting in her in-tray since February 2021.

But Kerswell has refused all calls to make its findings public until the situation with a fifth exec director, Hazel Simmonds, was resolved.

Back in November 2020, as she surveyed the wreckage of the bankrupt council, Kerswell explained that she was calling in the LGA’s Penn, to get to the bottom of what happened under Newman, Hall and their chief exec, Jo “Negreedy” Negrini. “We know what happened, that’s in the auditors’ Report in the Public Interest,” Kerswell told councillors at a scrutiny committee meeting.

“This independent investigation by the LGA will look at how it happened.

Decisions to take: council leader Hamida Ali and chief exec Kathrine Kerswell will both be at Thursday’s meeting

“If the investigation finds that formal questions arise, then that will take place,” Kerswell said.

That final loose end of the various disciplinary prtocesses should occur this Thursday, in a first-floor meeting room in Fisher’s Folly when five people – three councillors, plus Kerswell and Stephen Rowan, the council’s head of democratic services – gather to rubber-stamp a very carefully legalled report which seems likely to be intended to ease Simmonds out of her council job, where she has been on extended gardening leave for the past 14 months.

Simmonds was Croydon’s executive director of localities until she was suspended from duty in February 2021. Unlike the other six-figure-salaried executives who were implicated by the findings of the Penn Report – Lisa Taylor, Jacqueline Harris-Baker, Guy van Dichele and Shifa Mustafa – Simmonds refused to resign.

Instead, she has hung out for a possible pay-off, while going on the legal counter-attack by suing the council for race discrimination, victimisation and unlawful reduction in wages. Simmonds is also pursuing a complaint for racial discrimination against Kerswell herself.

Loose end: Hazel Simmonds

The meeting of the “Appointments (Investigating and Disciplinary) Sub-Committee” had orignally been scheduled for April 6. Senior Katharine Street sources confirmed that the meeting was to resolve the position with Simmonds.

But that meeting was removed from the council calendar without any explanation. “It can only be because they are really afraid of what might leak out,” one source suggested.

“By leaving it all this late, they must be hoping there’s less of a chance of the more damaging details of the Penn Report becoming public before polling day.”

Thursday’s meeting will be considering a set of recommendations that have not been published in advance, while the detail of the sub-committee’s deliberations are also likely to be kept secret from the public.

It was a similar meeting of the appointments sub-committee which in August 2020 approved the £437,000 pay-off to Negrini, the discredited chief executive, in what has emerged as a cynical effort to cover-up some of the many financial scandals at the council.

For their part, when Newman and Hall issued their resignations as councillors in March 2021, they were accompanied by bullish threats of legal action.

Newman claimed that he had “advice from leading counsel” about the Penn Report, of which he had had sight of a draft, and claimed that the report was “factually inaccurate [and] baseless allegations”.

Secret meetings: Tony Newman, after being suspended by the Labour Party, was quick to hold a meeting with new councillor Mike Bonello last May

“It is a witchhunt and a shambles,” said Newman, an expert at conducting witchhunts and presiding over shambles.

The former council leader and Hall have been administratively suspended by the Labour Party since. They are the only councillors thought to have been named in the Penn Report.

Nothing publicly has been heard of Newman in the past year, although he was quick to hold a meeting outside a South Norwood pub with the Labour councillor who replaced him in Woodside ward in the by-election caused by his resignation.

The secret report to Thursday’s secretive meeting is likely to have been drafted by Kerswell together with John Jones, who was the council’s interim legal chief until the end of March.

Inside Croydon understands that the three councillors on the sub-committee have only been allowed sight of the Penn Report at a specially arranged appointment at the Town Hall, under supervision of council staff, with no copies being distributed.

In the chair: Joy Prince

The three elected representatives attending on Thursday, where they will be expected to approve the secret report’s recommendations, are Lynne Hale, the deputy leader of the Conservative group on the council, Hamida Ali, the Labour group leader, with Joy Prince as chair.

Newman was Ali’s ward colleague for seven years, and did much to fast-track the young councillors rise to cabinet status at his “ambitious” council.

Prince, the veteran Waddon councillor, meanwhile, has been the chair of the Labour group at the Town Hall since 2018.

So Ali and Prince will both have had ringside seats as the clusterfuck at the council under Newman and Negrini unravelled before their eyes in the years leading up the issuing of the Section 114 notice in November 2020, making Croydon only the second council this century to be forced to declare itself effectively bankrupt.

Neither Ali nor Prince are seeking election on May 5.

Read more: Former health director suing council for constructive dismissal
Read more: Two executive directors in shock resignations from council
Read more: CEO Negrini’s long campaign to shut down Inside Croydon
Read more: Officials to investigate possible wrong-doing at 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
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13 Responses to Secret report into wrong-doing at council still kept under wraps

  1. James Collins says:

    A convenient disgrace.. I hope they all get their just desserts at the election.. Pelling is the only creditable choice… Why did Shawcross not show enough sense to distance herself from the previous Labour administration

  2. Shocking: do residents have no right to full and proper information, after all it is our money that is the salaries.

  3. Beth Newton says:

    This is such bollocks. The Penn report is not Katherine Kerswell’s to keep secret. It should have been made public months ago. The fact Katherine, probably for good reason, is named publicly in a separate action, is no reason to withhold the report from the Public.

    The public are suffering from rubbish Croydon services, a deplorable planning service, the mismanagement of keys assets and the financial results of winding up an ill-conceived development company – we have every right to see the Penn Report now.

    There’s one thing that’ll not be in the Penn report that I think the public will be demanding; the removal of Katherine Kerswell.

    I challenge readers to name one positive thing she has done. Or, come to that, one email she has replied to. She is not worth her grossly inflated salary.

  4. What’s Penn’s pay day? Here on Wirral he got £46,000 for a relatively short piece of work compared to this sordid, never-ending affair. Nice work when you can get it. Despite the fact that his attitude to public accountability stinks – I have the emails to prove it – he always comes up smelling of roses.

  5. derekthrower says:

    Newman and Negrini are culpable for the Council becoming insolvent, but have been allowed to walk away from the debacle rewarded with compensation for loss of position without facing any penalty. This is clearly wrong and future local government reform is required to make individuals responsible for their negligent actions. The legislation introduced during the Blair & Cameron eras created this situation of power without responsibility. We will now watch the shenanigans of the Biritish legal system brush this all under the carpet. I hope I am wrong.

    • Great words Derek. I saw two directors here on Wirral walk away with £110,000 each after spending 9 long years plundering the bank accounts of a large number of learning disabled council tenants. All sitting ducks. The total haul was £736,756.97. Just to rub salt into the wound, when the tenants finally got their reimbursements, the DWP stepped in and docked their benefits, classing the payments as ‘windfalls’. The next kick in the teeth was one of the abusers picking up the top job – Director of Adult Social Services – at Reading Council. She’d been gagged you see, and couldn’t refer to her history as it would have damaged both her AND Wirral Council’s reputations. CRACKERS!

    • What “compensation for loss of position” did Newman get? None, as is right and proper. He’s still to pay a penalty for his hopeless mismanagement of our council; prison would be a good outcome.

      With Negrini, the question is “why”, as in why was she paid anything? Newman being stupid with other people’s money is a partial answer, buying her silence is another. That leaves unanswered the matter of what was she being paid to keep quiet about.

      In his bid to become Mayor, Andrew Pelling has pledged to use forensic accountants to chase down the council’s lost £millions and get justice through the courts, if necessary. Richard Howard says something similar.

      If another candidate pips them to the post, will they do the same? Would Mayor Shawcross draw a veil over the scandals committed by her cheerleaders? Probably.

      Would Mayor Perry have the integrity to delve into the murky past of the budgets and decisions that he and other Tories voted through? Probably not.

      • Simon Furst says:

        Mayor Shawcross is Steve Reed / Tony Newman Continuity Labour – she’ll attempt to hide all Croydon Labours misdemeanours and she’ll ensure nothing changes in Planning. Valcross = Newman ll

  6. Dave Russell says:

    “executive director of localities ” – what on Earth does that mean?

    • Lancaster says:

      Dave, it means a ridiculous salary for talking utter crap with a straight face; then being lined up as a sacrificial pawn to perpetuate the top dogs ongoing incompetence; before jumping to another local authority and repeating the whole process….

  7. carol GEORGINA longmuir says:

    Meals on Wheels now stopping owing to Croydon cuts, due to the diabolical way money was squandered by Labour run Croydon Council. Heads should roll!!!!!!!

  8. Kevin Croucher says:

    The report into the events in Slough has been published, it certainly makes interesting reading; I hope we don’t have to wait much longer to see the Croydon one.

    • Sorry, Kevin, that’s not it.

      The Levelling Up department appointed an improvement panel here, too, and they’ve filed three reports so far – though the last was in December 2021, and they are getting on for six months overdue with the next one.

      There’s been a flurry of RIPIs and audits. The Penn Report was commissioned by the council, specifically Kerswell, and called upon a senior Local Government Association operator to conduct a set of interviews. The report has been with Croydon since about February 2021. It runs to 200-odd pages, and it is the reason that Newman and Hall got suspended by the Labour Party.

      His failure to have it published unredacted is among Mayor Perry’s first broken election pledges.

      He isn’t in charge of the council. The exec directors are, just as they have always been.

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