CROYDON IN CRISIS: The report into the council’s financial collapse that has been withheld for nearly two years includes damning criticisms of some of the council’s most senior staff and political leaders.
EXCLUSIVE by STEVEN DOWNES
Croydon’s dysfunctional council went bankrupt, according to Local Government Association investigator Richard Penn, because of “poor governance by the former political leadership of the council and by correspondingly poor managerial leadership from the council’s most senior officers”.
The Penn Report was handed over to Croydon’s current chief executive, Katherine Kerswell, in February 2021, but its contents have been withheld from most of the borough’s councillors, with only half-a-dozen of the borough’s elected representatives even being allowed a sight of its findings.
Until, that is, last night, when Inside Croydon published the first part of the hitherto unseen Penn Report. Penn recommended that councillors should consider calling in the police to investigate possible misconduct in public office, and also pursuing former CEO Jo “Negreedy” Negrini for her £437,000 pay-off because of possible breach of contract.
Penn is, by the usual, bland standards of civic authority report-writing, withering in his criticism of Croydon’s elected councillors and the senior staff at Fisher’s Folly.
Many of the 160 pages of Penn’s Report are taken up with cut-and-paste sections of the Report In The Public Interest from auditors Grant Thornton that was published in October 2020, just ahead of the council issuing the Section 114 notice that admitted that the authority could not balance its books. There’s also sections copied from other reports and reviews, such as PwC’s trawl through the books of Brick by Brick.
Penn even nicks the most memorable phrase from the RIPI, “Collective corporate blindness”, for the title page of his report.
The narrative throughout the report is one of a tug-of-war between Labour leader Tony Newman’s “Gang of Four” – which included Alison Butler, her husband Paul Scott, and Simon Hall, the cabinet member for finance – that controlled the Town Hall and the council execs.
Several of Penn’s 64 interviewees spoke of the deep distrust of council officials that developed in the Labour group after the adverse Ofsted report on Croydon’s children’s services in 2017, when Newman and his clique had been assured that the department would sail through the inspection.
The report also points to a power vacuum that was created when executive director of resources, Richard Simpson, abruptly quit Croydon at the end of 2018, and he repeatedly refers to how Jacqueline Harris-Baker and Lisa Taylor, both promoted to top jobs by Negrini, were too inexperienced or unqualified for the roles.
But by promoting from within, Negrini ensured her own role and decisions could go largely unchallenged.
Penn’s recommendations specifically mention Harris-Baker, the erstwhile executive director of resources and Monitoring Officer, and Taylor, the director of finance and S151 officer, plus Shifa Mustafa (exec director for place), and he says consideration should be “given to whether the concerns raised in this report warrant further formal [disciplinary] proceedings”.
All three officials resigned from Croydon Council within months of the Penn Report landing on Katherine Kerswell’s desk.
Penn further recommended consideration of whether there had been breaches of the Member Code of Conduct by Newman and Hall.
In another recommendation, paragraph 14.14 of the report, Penn says, “Concerns have been raised about the behaviour of the Executive Leadership Team as a group and its behaviour in response to possible breaches of the Officer Code of Conduct in regard to bullying behaviour.”
Allegations of bullying were made by interviewees against Negrini.
As well as Taylor, Mustafa and Harris-Baker, the other members of the Executive Leadership Team were Guy van Dichele and Hazel Simmonds, who were both suspended in February 2021 and who both subsequently took complaints against the council to the Employment Tribunal.
Penn’s brief in conducting the report was to “explore what led to the council being in such a perilous and precarious financial position”.
And later in his report, Penn writes, “What happened in Croydon seems to have been an assertion of power to control the operational domain of the council by certain elected members and an apparent acquiescence to that by some senior officers.
“It would appear that those with the biggest responsibilities and personally-held statutory duties let the organisation down.
“Major risks within the council’s revenue budgets and in its investment portfolio appear to have been downplayed in the face of what seemed to have been unbridled optimism and seemingly an almost reckless disregard of the potential adverse consequences of these risks.
“By narrowing its focus and attention to a small number of commercial, regeneration and other goals, the council appears to have effectively blinkered itself to its wider responsibilities.”
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