CROYDON IN CRISIS: Tony Newman and Simon Hall, the duo who were in charge at the Town Hall in the months leading to its financial collapse in 2020, have hired a flash, West End PR firm to issue a statement on their behalf claiming the borough’s bankruptcy was nothing to do with them. ‘We acted with integrity and honesty’ they say.
By STEVEN DOWNES
And the Brass Neck of the Year Award goes to….
Back in March 2021, shortly after they had both resigned as councillors and been suspended by the Labour Party, Tony Newman, the leader of Croydon Council from 2014 to October 2020, and Simon Hall, his cabinet member for finance, both issued very similar statements bleating on about how the council-commissioned Penn Report was just all hearsay and a bit of a witch-hunt.
At that stage, Newman and Hall had already had sight of the Penn Report, which had been written by Local Government Association consultant Richard Penn, who had been tasked with looking into possible wrong-doing at the council in the lead-up to it declaring bankruptcy in November 2020.
The Penn Report has been kept under wraps ever since, with the council’s current chief executive, Katherine Kerswell, more concerned about the risk of follow-up litigation against the authority than actually doing anything to deal with those responsible for what was, at that time, the biggest financial collapse in the history of local authorities in England.
Because the Penn Report, as Inside Croydon has revealed this week, recommended that the Metropolitan Police should be called in to investigate possible misconduct in public office, and a further suggestion that Jo Negrini, the former CEO, may have broken the terms of her contract and could therefore be pursued to refund her £437,000 pay-off.
Penn didn’t categorically state that there had been misconduct in public office – an offence which can carry a life-time prison sentence for those convicted – but he did recommend that councillors should consider calling in the police to investigate. Kerswell, as chief executive, has so far prevented the vast majority of the borough’s elected representatives even seeing the Penn Report, never mind deliberating on its recommendations.
The emergence of the Penn Report has prompted Newman and Hall – who both remain under “administrative suspension” by the Labour Party – to hire a firm of expensive West End spin doctors. Palatine Media specialises in crisis management: “Reputation is difficult to quantify, but everybody knows it is important,” says the firm hired by the two former Labour councillors who left £1.5billion of debt on Croydon’s books. “Our firm’s mission is to help you connect with your stakeholders, building trust and value for you and for them.” Which is nice.
Palatine’s Richard Seed, who may not know Newman or Hall very well, has issued lengthy statements on behalf of his clients, a line or two of which got used in an article published yesterday by the Grauniad.
Here, for the benefit of the people of Croydon whose Council Tax paid for their allowances and expenses for so many years, are the statements from ex-councillor Tony Newman and ex-councillor Simon Hall in full.
“This Penn report is one of a series of attempts to discredit us, all of which have failed.
“Croydon’s problems have been painful for all of us, but the unavoidable truth is that decisions made by the council were made in good faith and were made collectively by the entire cabinet. No evidence of wrongdoing on our part has been found, because no such evidence exists.
“We have repeatedly been cleared of any wrongdoing with regard to the purchase of the Croydon Park Hotel. An independent report by PwC confirmed the correct procedures were followed. The council’s scrutiny committee publicly supported the decision ahead of the purchase. And evidence given by council officers to a parliamentary select committee last year confirmed that council members followed advice correctly regarding the valuation of Croydon Park Hotel.
“Whoever has leaked the Penn Report is trying to ignore these inconvenient truths and throw dust in the eyes of the public.
“There is a reason the Penn Report has not been published – and that is because it has been hopelessly compromised from the start. It is a politically-motivated witch-hunt. Its methodology and findings were contradicted by objective evidence at every turn. The Maxwellisation process it is currently going through is essentially an attempt to sterilise these flaws in the report. Croydon Council’s own legal advice deemed the report so contentious that it warned councillors against publication. Even in the wake of this leak, councillors have been reminded that the document was flawed. It is therefore regrettable that somebody has now fished the rotten original version out of the dustbin.
“The real losers in all of this are the people of Croydon. Instead of getting answers to their questions, they have shadowy players trying to manipulate their perceptions and scapegoat former councillors who have limited means to defend themselves.” Says a man who has just gone out and hired a PR firm to manipulate public perception of himself…
“We acted at all times with integrity and honesty,” says Tony Newman, who authorised the spending of at least £5million over the asking price for a run-down suburban hotel that was running down its lease.
“Simon and I very much regret the council’s financial crisis, but things can go wrong without there being any wrongdoing. If we had known a pandemic was coming, of course we would have looked for additional ways to protect Croydon’s finances,” says the former council leader who ignored at least two warnings from external auditors about dangerously low levels of financial reserves in the years before the pandemic hit Croydon.
“But to suggest that anybody at the council breached the Nolan Principles is false and defamatory,” which is probably a matter better determined by the police, or a jury, than the person at the centre of the biggest council financial crash in 20 years.
“There is not a shred of evidence for such a claim provided in Penn’s report. In fact, all the evidence demonstrates that the proper procedures were observed, and that we as elected officials took appropriate advice from professionals, including legal and financial advice.” Translation: it was all the council executives’ fault…
“The Penn Report was a collection of subjective and unevidenced viewpoints compiled via a series of anonymised interviews. It made no serious attempt to investigate, process or properly interpret the allegations in those interviews, and the so-called recommendations it arrived at were unjustifiable in terms of logic and methodology.
“That is why it has widely been considered unsafe, unreliable and ultra vires, as well as defamatory, and has never seen the light of day. That is also why Croydon Council’s legal advisors warned against publication at every step and why the council has made it clear that only an executive summary of the report may be publishable. It is inconsistent with other, better-resourced inquiries into Croydon Council.
“Everyone who served as a councillor, myself included, truly regrets Croydon’s financial crisis, and the constraints it continues to put on public services and families in the borough. But it would be wrong to attribute Croydon’s problems just to spending decisions. This is also about longer-term funding shortfalls from central government, which we were powerless to influence.
“For the avoidance of doubt, Croydon was forced to issue a Section 114 notice because of a single ‘black swan’ event – namely the covid shutdown, which choked the council of revenue while adding enormously to its costs. It was a perfect storm, and we were unable to weather it because of years of underfunding and austerity, which left us with very limited financial room for manoeuvre.
“Croydon has suffered from underfunding since at least the 1990s. The past decade of cuts from central government have been especially tough. Figures from the National Audit Office make clear that our spending power per head of population has fallen 30per cent in real terms since 2011.
“The pressure that austerity-driven cuts put on Croydon is enormous. Issues around housing benefit have made temporary accommodation a particular issue for Croydon. Welfare reform has caused an influx of people from inner London boroughs, putting added strain on public services. We’re now more deprived as a borough than neighbouring Lambeth, yet we get £70million less funding per year than Lambeth.
“Because the Home Office is in our borough, we also look after a large number of Unaccompanied Asylum Seeking Children. We are not remotely fully funded for that obligation, which is fulfilled on behalf of the entire nation yet has landed at Croydon’s door.
“We spent many years wrestling with these challenges, often successfully and always in good faith. But those challenges will persist, even as Croydon recovers from the pandemic. The same challenges will continue to beset our borough if politicians are not honest or sensible enough to address them.
“If we are to learn the right lessons, we need to acknowledge what the problems are. This pseudo-report from Penn was a lost opportunity to have a serious conversation about Croydon’s financial problems – past, present and future.”
Read more: #PennReport wanted police probe into possible misconduct
Read more: #PennReport: Croydon has been let down by political leaders
Read more: #PennReport: Hall and Negrini ‘only wanted good news stories’
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