CROYDON IN CRISIS: Millions of pounds of public money are at stake, a matter not to be sniffed at, but government minister is staying schtum over state of cash-strapped council’s finances.
EXCLUSIVE by STEVEN DOWNES
Tight-lipped: Michael Gove has refused to explain why he has not released a Croydon report he has had since March
Michael Gove, re-installed as Secretary of State at the Department for Levelling Up, Housing and Communities, has refused to answer any questions about when the government-installed improvement and assurance panel overseeing the running of cash-strapped Croydon Council will publish its latest reports.
Katharine Street sources suggest that the usually gobby Tory minister has suddenly gone schtum because of the increasingly parlous state of the council’s finances, despite the election in May of a Conservative Mayor.
Some suggest that despite taking over a balanced budget, that had been approved by the improvement panel, Jason Perry, Croydon’s £81,000 per year part-time Mayor, was already almost £20million over budget within his first six months in office.
It is now almost 12 months since the last published report from the improvement panel that was imposed on Croydon after the Labour-controlled council crashed the borough’s finances in 2020.
The panel is effectively a Whitehall commission supposed to oversee how the spendthrift council has been managing public money since it received a £120million bail-out from central government. The panel, chaired by Tony McArdle, was installed in early 2021 and was due to provide the Levelling Up department with regular reports every three months.
Slow progress: government officials in Marsham Street are reluctant to comment on the Croydon situation
Up till December 2021, that all seemed to be going to plan, with McArdle’s panel – including Margaret Lee, Phil Brookes and Jon Wilson – generally satisfied with the progress being made in the first calendar year after the financial crash.
In their 14-page-long fourth report, addressed to Gove on December 7, 2021, McArdle and his colleagues wrote, “Since this time last year, when it published the Croydon Renewal Plan, the Council has essentially made progress on three broad fronts.
“First, it has stopped making poor, opaque, and expensive decisions that were unsupported by sound evidence or by feasible business plans. Given the history of the past few years and which precipitated the crisis, the absence of such failings is worthy of remark,” they wrote, indulging themselves in a touch of dark humour.
“Secondly, the council has accepted that it must radically reform to adopt modern business processes, embed sustainable financial disciplines and deliver the right outcomes for its residents. Tough decisions will have to be taken in order to make that reform possible.
“Finally, the council has begun the task of making changes to its culture, financial planning, and operational procedures to provide a route into this reform.”
Later in the report, the panel referred to the fact that the council’s auditors were refusing to sign-off two years’ worth of accounts, in one instance because of the possible misuse of £73million of what was meant to be ring-fenced Housing Revenue Account money – a matter dismissed somewhat high-handedly by the council chief executive Katherine Kerswell as simply “an accounting problem”.
Gone missing: nothing has been seen or heard from Tony McArdle and his improvement panel since last December
With the foresight of latterday Nostradamuses, the improvement panel noted to the Secretary of State last year, “We have consistently observed that the task of recovery would become harder before it could become easier. One year in, we are at a point where things are indeed becoming harder.”
And since then… tumbleweed. Not another peep has been seen or heard publicly from Tony McArdle and his team.
Their next report was due in March. Inside Croydon knows that this was delivered to Gove on time, because the DLUHC has confirmed that he has it. Twice.
In August, a spokesperson for the Department told this website, “The London Borough of Croydon improvement and assurance panel’s fifth report has been received by the department.
“We anticipate the next panel report being submitted in late September and we are committed to publishing all reports… and will do so as soon as possible.”
The submission of Report No6 in September reflects a shift to six-monthly reporting, a sign that the panel, at least, had agreed that things in Fisher’s Folly were going in the right direction – apart from the rather irritatingly slow progress of the winding-up of Brick by Brick, the low price received for the Croydon Park Hotel, and that little matter of the Housing Revenue Account.
But it doesn’t explain why Report No5, received by Marsham Street last March, still hasn’t seen the light of day.
Slower progress: the disposal of Brick by Brick properties, such as Kindred House, has been irritatingly slow
One theory doing the rounds on Katharine Street is that, just weeks before the local elections, the report might have been used for political campaigning purposes by Labour, showing how they had government approval of their recovery plan.
But that doesn’t explain why DLUHC has kept the report tightly under wraps since May, though.
Another suggestion is that the delay in publication has been because of the churn of ministers at the Department in the middle of the hugely unstable Tory government.
Croydon’s bail-out was approved by Robert Jenrick (sacked), who was followed by Gove (sacked by Boris Johnson after 10 months in office for being a “snake”), Greg Clark (lasted 45 days until Thick Lizzy Truss took over as PM) and Simon Clarke (in charge for just 49 days), before Gove returned under the latest Prime Minister, Rishi Sunak.
But again, that excuse does not stand up to much scrutiny when you check the interventions announced by the Department over the last three months for a steady stream of failing councils, from Thurrock to Nottingham, to Slough, Liverpool and Sandwell.
Indeed, in June of this year, DLUHC made the announcement that it was adding Wilson to the Croydon improvement panel, specialising in adult social care “to make the changes needed to turn the council round”.
‘New team’: much the same as the old team – Gove and PM Rishi Sunak, back together in the Commons
So why not publish the improvement panel’s report that they had, by that time, been sitting on for three months?
Indeed, they’ve now had Report No6 for around six weeks, and have also failed to publish that.
Which is what we put to the Department this week. As we pointed out to the DLUHC, since the last report was released in December 2021, the next report has been around so long that it will have been on the Secretary of State’s desk since Michael Gove was last in charge all those weeks ago.
We specifically asked for a comment from Gove himself, to offer an explanation for this lengthy delay, when there are many millions of pounds of public money involved. These are amounts not to be sniffed at.
The minister refused to speak for himself.
Instead, it was left to a spokesperson to issue a (very) brief statement, which in some respects contradicts the “committed to publishing all reports… as soon as possible” line offered by one of their colleagues three months ago.
Remember, the fifth report by the panel was delivered to Gove in March of this year.
“We are working closely with Croydon Council as it seeks to address the challenges it faces,” the spokesperson said.
“We have received the fifth report from the assurance panel and will publish in due course.”
Things must be very bad for part-time Perry and his chums.
Read more: ‘We’re not teetering on the brink of bankruptcy’ claims Kerswell
Read more: Council admits: We’re on the brink of bankruptcy. Again
Read more: Council faces new storm over ‘missing’ £73m housing money
Read more: Things are about to get even harder, warns report to ministers
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Notwithstanding the cuts to local government fundin since 2010 and the consequences of that, I don’t understand why central government is sitting on this. Labour were running Croydon Council when what happened happened. If I were running Conservative Party HQ I would make hay and use Croydon as a paradigm of what happens when Labour runs things. No brainer.
Perhaps they are saving it for the general election.
Mind you, given the KamiKwasi fiscal event on 23 September 2022, I guess Labour and Tory are as hopeless as each other.