Investigations into wrongdoing in local government can take many years. A meeting at the Town Hall next week could provide a long-awaited chink of public accountability into the mismanagement – possibly worse – that led to Croydon Council’s financial collapse, reports KEN LEE
Three former senior council executives and an ex-council leader have this week been charged as part of an investigation into financial irregularities.
Not one of them has any obvious connection to Croydon, despite the south London council’s financial collapse in 2020, plus serious concerns expressed by auditors over possible fraud running into tens of millions of pounds, and strong evidence of unauthorised payments having been made using large wedges of public money.
The police action this week has come in north-west England and relates to cases dating back nearly 10 years. These things clearly take time.
Former Liverpool chief executive Ged Fitzgerald, ex-interim chief executive officer David McElhinney and former Lancashire County Council chief executive Phil Halsall are to appear before magistrates in October, while former Lancashire council leader Geoff Driver has been summonsed to face a charge of (checks notes) “Taking Revenge under the Criminal Justice and Public Order Act”.
According to a report in the Municipal Journal, “They have been charged as part of Operation Sheridan, an investigation into financial irregularities at Lancashire that began in 2013 involving police in Lancashire and Merseyside… the county council and Liverpool City Council.”
McElhinney and Halsall have both been charged with misconduct in a public office and procuring misconduct in a public office.
Fitzgerald faces charges of misconduct in a public office, and aiding and abetting misconduct in a public office.
A spokesperson for the county council came up with the usual platitudinous guff, lifted straight from the local government executives’ handbook on covering your own arse: “cooperating fully with the police throughout the investigation”, and “allegations from many years ago”, “none of those summonsed still work for Lancashire CC”, “focused on the future – not the past”.
So that’s alright then.
Liverpool City Council, previously under Labour control, is currently in “special measures” and is being run under the supervision of government-appointed commissioners, not dissimilar to the position that Croydon is in.
As Private Eye has reported this week, Fitzgerald was first investigated in 2017 over accusations of conspiracy to pervert the course of justice and witness intimidation in respect of BT outsourcing deals in the north-west. One of Fitzgerald’s previous jobs had been CEO at Lancashire County Council. In Liverpool, as a consequence of the investigation, he was suspended from his job and resigned in 2018.
The latest charges are the first to be brought by the police against Fitzgerald, who has previously denied any wrong-doing.
It was May 2017 when police raided the homes of Driver, Halsall, Fitzgerald and McElhinney. McElhinney had been the boss of Liverpool Direct – a city council-owned business partnership that worked in IT.
A notable absentee from the list of those to appear before the beak is Joe Anderson, the elected Mayor of Liverpool who in 2020 was subject to a high-profile arrest on suspicion of bribery and witness intimidation linked to the contracts investigation. Anderson also denied any wrong-doing, and he has never been charged, but he chose to stand down as Mayor.
In April, Lancashire police announced that they had contacted four men – none named – to advise them that they will not be subject to any further investigation. It is possible that Anderson, 64, is one of those.
Joe “The Don” Anderson still might be charged in connection with a separate police investigation, Operation Aloft, concerning property deals in the city, which saw him arrested in December 2020 along with Derek “Degsy” Hatton and others.
Any similarities between Anderson and, say, Croydon’s very own discredited former Labour council leader, Tony “Soprano” Newman, are obviously mere coincidence. Last year, a commissioner’s report into the running of Liverpool under Anderson found staff saying “corporate management and oversight was sketchy” and the atmosphere was “intimidating”.
Anderson rejected such criticisms. “It’s absolutely absurd to try to create this impression that Joe Anderson is like the don of Liverpool,” the Don of Liverpool told one national newspaper.
The Don of Croydon
None of the Lancashire cases are related to the situation in Croydon, though they do illustrate how such matters can take far too long for the forces and law and order to pull together their case. And they also show how senior figures in local government continue to sweep under the Town Hall carpets any hint of malpractice by their erstwhile colleagues, no matter what they might be accused of.
In Croydon, a meeting at the Town Hall next Wednesday might later provide a glimpse into the outcome of some of the investigations that have been conducted – all at significant cost to the public – into the financial collapse of the council. Although we have been led to believe that would be the case before…
And it’s unlikely that the meeting itself will provide much illumination on the situation: council officials have decided that the press and public will be excluded from large sections of the meeting.
For the last two years, Croydon Council has been the subject of no end of reports by consultants and experts into a whole range of mismanagement and maladministration, including the catastrophic failings in the council’s housing department and the massive money pit that was Brick by Brick.
Yet not a single figure involved in the running of the council, whether the ex-CEO, director-level members of staff, directors of council-owned businesses or any of the borough’s third-rate politicians has been held to account.
So serious were their concerns about the way Croydon was being run under chief exec Jo Negrini and leader Newman that the council’s auditors felt the need to publish not one but two Reports In The Public Interest.
The latter of those RIPIs led to the current grope by investigators Kroll through how Brick by Brick and its contractors managed to burn through £67million of public cash for the incomplete, unfinished and deeply unsatisfactory refurb of the Fairfield Halls.
Kroll have been delving into the matter for nearly six months, have cost Council Tax-payers at least £300,000 to do so, they say they won’t have a final report ready until October, and so far – despite the auditors’ clear misgivings – Kroll say that haven’t found anything worth reporting to the police. Ho hum…
Before Kroll came Penn.
Richard Penn is the Local Government Association official who was called in by the then interim CEO, Katherine Kerswell, in November 2020.
“We know what happened, that’s in the auditors’ Report in the Public Interest,” Kerswell told councillors at a scrutiny committee meeting nearly two years ago.
“This independent investigation by the LGA will look at how it happened. If the investigation finds that formal questions arise, then that will take place,” Kerswell said then.
Kerswell has had her hefty copy of the resulting Penn Report under lock and key in her office at Fisher’s Folly at least since February 2021. The handful of elected councillors who have been deemed trustworthy enough to be allowed to read the report have had to do so in a room at Fisher’s Folly, while being carefully watched by a member of council staff. It’s the kind of security more normally associated with the nuclear weapons codes…
Although the Penn Report has never been published, its findings are widely believed to have led to the suspension from the Labour Party of Newman, who was leader of the council from 2014 to 2020, and his finance chief, ex-councillor Simon Hall. The Labour Party has taken no further action in the cases of Newman and Hall.
Separately, soon after receiving the Penn Report, Kerswell suspended five of the most senior employees of the council. Four of them subsequently moved on, some into other well-paid, senior jobs with other councils. One of them, Guy van Dichele, is understood to still be pursuing Kerswell and the council in a case of constructive dismissal.
But one remained: Hazel Simmonds, Croydon’s £150,000 per year executive director of localities who has spent the last 18 months on gardening leave.
Simmonds 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 was also pursuing a complaint for racial discrimination against Kerswell personally.
Katharine Street sources suggest that after various false starts and previous meetings, next Wednesday’s meeting of the Appointments and Disciplinary Committee might finally resolve the Simmonds situation.
The agenda includes a 130-page report on a “Confidential Staffing Matter”, which is being kept from the public.
It’s clearly a very serious matter, though not serious enough for Jason Perry, Croydon’s part-time Mayor, to bother to turn up. The £81,000 per year Tory Mayor would usually be expected to chair the Appointments committee, but next Wednesday will see his deputy, Lynne Hale, step in for him.
Perry made it an election manifesto pledge to publish the Penn Report, a promise which the brains behind the Croydon Tories’ council operation, Jason Cummings, recently repeated in a written council answer.
Given that most of Penn’s report covers the years of Labour misrule at the council under “Soprano” Newman, which according to auditors Grant Thornton were years of “collective corporate blindness”, with unminuted meetings and missing legal agreements, it seems unlikely that there is much of a political downside for Croydon’s Conservatives to publish the report in as full a version as is possible.
According to sources at the Town Hall, CEO Kerswell did make an offer to the new Mayor in his first weeks in office to release a version of the Penn Report. But Kerswell’s summary of the report’s findings had removed so much of its content and left it so anaemic as to be rendered utterly worthless. Perry is said to have declined the offer, preferring to wait for an opportunity to make public a less tampered version.
That opportunity may finally arrive next week.
Read more: Suspended director sues Kerswell for ‘race discrimination’
Read more: Former health director suing council for constructive dismissal
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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