Political editor WALTER CRONXITE on early signs of less accountability at the Town Hall under the Conservative administration
Jason Perry, Croydon’s part-time Mayor, will tonight be accused of “closing down the books” by reducing the frequency of reports on the cash-strapped council’s finances and providing fewer updates on how the council is progressing against its latest budget.
Mayor Perry is expected at a Town Hall meeting tonight, where he will be presented with a report from a member of his emasculated cabinet entitled “Opening Up The Books”. According to the propaganda unit at Fisher’s Folly, this will be an “exercise to improve its understanding of current financial risks and continues to work towards a sustainable financial future”.
Perry calls this “a deep dive into the council’s finances”.
But opposition councillors suggest that what Perry and his cabinet member for finance, Jason Cummings, are really planning to do is to keep the day-to-day detail of the council’s finances under wraps for as long as possible, as they prepare for another swingeing round of cuts to Town Hall spending, increases in charges and axing more jobs, as they contend with the difficulties created by the nation’s failing economy.
They also question why Perry has still not published the Penn Report, drafted 18 months ago by a senior official from the Local Government Association, which itself was supposed to be a “deep dive” into possible wrong-doing at the council when it was being run by Tony Newman, the discredited former Labour leader.
Croydon has received £120million from government in bail-outs since the borough went bust in November 2020. But that money has come with plenty of strings attached.
Since the council’s financial collapse under the previous Labour administration, the council adopted a practice of publishing forecasts on its capital programme and Housing Revenue Account. The frequent reporting was welcomed by government-appointed inspectors.
But there have been no such monthly updates for the last three months, since Perry won the mayoral election.
In Cummings’ report to cabinet, he says, “The council’s financial position continues to be very challenging.
“Its past financial problems have not yet been overcome and it is yet to return to financial sustainability.
“The well-documented previous mismanagement of finances has left the council in a weak position to whether [sic] the storm of inflation and global impacts currently being experienced.”
Cummings’ report even admits that monthly financial reports has been a marked improvement in the way the local authority has managed its money.
It says, “Over the last year, the cabinet has received monthly reports on the General Fund, Housing Revenue Account and Capital Programme, providing a step-change improvement in transparency in relation the council’s finances.” Those are our italics.
“Projected outturns, risks and opportunities have been examined in detail each month.”
But that is all about to be brought to an abrupt end under the cliché-loving Tory Mayor, who is about to go on a journey…
“This report launches the next stage in this journey which is the Executive Mayor’s initiative to ‘Open the Books’ of the council. The council’s finances will be scrutinised over the next six months through a review of its balance sheet, its capital financing arrangements, all reconciliations and the financial relationships with the council’s companies.
“This project will provide a firm base position from which to achieve financial sustainability by 2024-2025, in line with the plan reviewed by the Improvement and Assurance Panel which was established by the Department of Levelling Up, Housing and Communities to oversee Croydon’s recovery.
“The ‘Opening the Books’ review will further improve the council’s understanding of its financial risks and will develop additional plans to mitigate them. These plans will contribute to the next stage in the development of the Council’s Medium Term Financial Strategy.”
The report admits further harsh cuts are still to come, saying that the council “will need to find extensive savings over the next three years and planning is underway for this now”.
“This year represents the most challenging to date in terms of delivering the savings already identified, at the same time as developing new plans for additional savings on top.”
Note that: additional savings. On top.
“Sustained focus on this agenda from the whole organisation is vital,” the report states, starkly.
So all those mayoral spending pledges made by Perry during the election campaign? Forget ’em.
The reduced accountability, and the failure to finally publish the Penn Report, has got the Labour opposition at the Town Hall asking pointed questions over this new financial cover-up.
“It doesn’t help the Tories, and it certainly won’t help the Croydon public,” said one source. “The only people this will help are the senior council executives who are supposed to be running the place.”
In April, the council reported a £2million underspend on its budgets.
Katharine Street sources say that, in the two months since Perry became Mayor, that position has been changed to an £18million overspend on the budgets.
“That’s some start by Part-time Perry,” said the source.
In the report going to cabinet tonight, there’s no departmental level numbers, there’s just 17 words on the state of the Housing Revenue Account (worth a mere £90million, at last count), and nothing at all on the council’s £112million capital programme.
Full financial figures now won’t be available until “no later than January 2023” – a nine-month break from the monthly reporting.
The council cabinet papers state: “The final outturn position will be reported once the annual closedown of accounts has been completed, prior to the annual accounts for 2021-2022 being published. The latter will be delayed until the autumn [of] 2022 due to outstanding issues in relation to the external audit of the accounts for 2019-2020 and 2020-2021.”
This is an oblique reference to the “missing” £73million of Housing Revenue Account money, which is supposed to be “ring-fenced” and only used for housing matters. But auditors Grant Thornton discovered the cash had been used to pay for other items of general council expenditure.
The matter has yet to be resolved, with council CEO Katherine Kerswell spending tens of thousands of pounds of public money to hire expensive lawyers to come up with legal arguments to justify the use of the HRA money.
Significantly, there has been no word on this matter from Tony McArdle and his colleagues on the government-appointed improvement panel.
Their last quarterly report was submitted to Michael Gove, the Tories’ Levelling Up minister, in December 2021 – before Grant Thornton revealed their discovery of the £72million mis-spend. The next improvement panel report was due in March this year. When they were approached this afternoon, the DLUHC was unable to say why this important update had yet to be published.
Katharine Street sources suggest that Tories at Westminster have already been trying to help Mayor Perry and the Tories in Croydon, by reducing the need for improvement panel reports to every six months, and by slackening some of the demands placed by McArdle and his commissioners.
Last month, Stuart King, the new leader of the Labour group at the Town Hall, asked the Mayor to confirm that he would continue with the monthly financial accountability. Jason Cummings said that it would, and that it was a manifesto pledge by Perry.
In a council press release issued ahead of tonight’s meeting, Mayor Perry said, “By opening the books and accounting for every penny, we will make sure there are no further surprises for Croydon and that we have firm plans in place to mitigate any remaining risks.”
But King has tweeted, “If Mayor Perry is ‘opening up the books’ why has he failed to publish the latest forecast for the capital programme (£112m) and Housing Revenue Account (£90m)? Both published every month until he took office.”
King added, “Quarterly [reporting] is not frequently enough.
“Cabinet and all councillors should see detailed monthly financial reports. This is what was introduced, supported by the government panel, and now seems to have been dispensed with.”
King is also animated by another report expected to be pushed through on the nod tonight, which will increase a range of charges levied by the council. Among the increases, registrar fees for a weekday wedding will go up from £416 to £433, while the cost of a burial plot for 50 years will go up from £3,680 to £3,790.
King wrote, “He is also proposing £8million hike in fees and charges for things like weddings, funerals and other council services. The report setting out these increases deliberately omits current cost, so public can’t see how much each charge is going up.
“Not so much opening up as hiding away.”
Read more: Part-time Mayor Perry is only ‘listening’ four hours a day
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