CROYDON IN CRISIS: Borough’s most senior lawyer, responding to advice the council received almost nine months ago, says that the meeting that agreed to pay £437,000 to departing chief exec was ‘potentially unlawful’.
By STEVEN DOWNES
The council’s glacially slow progress at pursuing any cases of wrong-doing that may have led to its bankruptcy in 2020 has been reported by the local government trade press this week, following Inside Croydon’s exclusives since October on the Penn Report and the dodgy £437,973 pay-off to former chief exec Jo “Negreedy” Negrini.
As Inside Croydon was first to report, the very generous settlement was pushed through at what was probably an unlawful meeting of the council’s appointments and disciplinary committee in August 2020, held just weeks before the authority’s financial collapse was confirmed.
That committee was chaired by the then leader of the council, Tony Newman, even though the settlement was arranged because of an irreparable breakdown in his relationship with the chief executive, who had lodged a formal complaint about his conduct. Newman resigned as a councillor early in 2021 and his membership of the Labour Party has been under “administrative suspension” ever since.
This week The Municipal Journal reported that Croydon “is pushing ahead with plans to clawback hundreds of thousands of pounds paid out to ex-chief executive Jo Negrini”.
Inside Croydon reported last month of the legal advice, provided in April this year by Jane Mulcahy KC of Blackstone Chambers, that the council’s prospects of success in a court case alleging that Negrini had acted in breach of contract were “better than evens”.
The advice was requested by the council following the 2021 report from the Local Government Association’s Richard Penn which the council’s current CEO, Katherine Kerswell, refuses to make public, but which iC has published extracts from over the past three months.
After having had that report for almost two years, Kerswell has failed to enact any of Penn’s recommendations.
These included that elected councillors – rather than senior council officials, such as Kerswell and the council’s lawyers – should “consider a review of the settlement agreement that was signed by the council with the former chief executive and whether the concerns raised in this initial investigation constitute a repudiatory breach of her contract and thus a breach of the terms of the settlement”.
When Inside Croydon published the Mulcahy advice, the council’s response was to take this website to the High Court for an injunction to gag us.
The judge in the case also dismissed Croydon Council’s application for a third-party injunction, which is why other publications have been able to go ahead and re-publish parts of the Mulcahy advice.
As The Municipal Journal reports this week, in her advice Mulcahy said, “It is likely that JN breached the agreement by her actions – alternatively inaction – concerning the Fairfield Halls refurbishment in that she must have been aware of the chaotic and probably unlawful approach to the refurbishment at the time of entering into the agreement whereas the council was not so aware, and/or she should reasonably have known that her part in the debacle constituted a repudiatory breach of the contract.”
A March 2022 note by Browne Jacobson solicitors said an investigation by external auditor Grant Thornton “resulted in findings of significant failings by JN and failures by her to discharge her contractual and statutory obligations”.
And the Local Government Chronicle is reporting that Croydon Council “has admitted to ‘significant failings’,” over the Negrini settlement.
The council became obliged to investigate the circumstances of the Negrini payment when the matter was queried by external auditors Grant Thornton in their second Report In The Public Interest, this focused on the £70million “refurbishment” of the Fairfield Halls, which they issued in February this year.
Once again, Kerswell attempted to keep this important formal auditor query a secret from the public. Inside Croydon published details of the Grant Thornton query in April.
The LGC reports that in its response to Grant Thornton, Croydon Council has concluded that the Negrini payment “should not have been made”, and refers to the “potentially unlawful” nature of the Newman-chaired committee.
The report by council officials to that committee failed “to set out the facts” relating to the breakdown of trust between Newman and Negrini.
Inside Croydon reported in April that the meeting, “was hurriedly arranged and all held in secret. There would be no formal reports circulated in advance, as would normally be the case with important council business.
“Indeed, the councillors summoned were given nothing in writing at all, no report, no recommendations, not even an agenda. Just the 10.30am start time and the codes to log-in for the meeting which, in line with pandemic precautions, was to be held remotely.”
The LGC reports that Stephen Lawrence-Orumwense, the current head of the legal department at Croydon, has written in his response to Grant Thornton that “it appears that concerns about potential leaks were given priority over adhering to constitutional and statutory requirements for notice and agenda papers to be sent to [councillors] in advance of the meeting”.
And in common with much business conducted at the council and within the Croydon Labour group when Newman was in charge, no proper records were kept of conversations between the council leader and council officials leading up to the decision to give Negrini her very generous golden handshake.
Unmentioned in any of the trade press’s reports have been the names of the attendees at that appointments committee at the end of August 2020. As well as Newman, there were five other councillors. These included Jason Perry, now the executive Mayor of Croydon.
No record of the vote, or how councillors voted, has ever been published by Croydon Council. Perry is thought to be one of two Conservative councillors who voted against making the pay-off to Negrini, but were out-voted by Newman, Simon Hall, Alison Butler and Alisa Flemming, the four Labour councillors on the committee. Only Flemming remains as an elected councillor; she is the ceremonial Mayor of Croydon for 2022-2023.
Read more: Newman and Negrini’s pay-off: no papers, no notes, no reasons
Read more: More Town Hall secrecy as auditors question Negrini’s pay-off
Read more: #PennReport wanted police probe into possible misconduct
Read more: #PennReport: Cover-ups and denial over Brick by Brick failure
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