CROYDON IN CRISIS: With the Penn Report into possible wrong-doing at the council expected to be released by officials shortly, the former council leader has responded to reports in the national press.
By STEVEN DOWNES
The Daily Mail today became the second national newspaper this week to publish an in-depth report into Croydon Council’s financial collapse, which happened in 2020.
Tory Mayor Jason Perry’s 15per cent Council Tax hike and his extraordinary and unprecedented request to government to write-off £540million-worth of the authority’s debts has re-focused attention on the “dysfunctional” council.
Hundreds of millions of pounds of public money has been wasted in Croydon by Brick by Brick, the council-owned house-builders, and over the fiasco of the botched Fairfield Halls refurbishment, with insult then added to injury with the controversial £437,000 golden handshake on the departure of Jo Negrini as the authority’s chief executive.
The Mail’s report follows similar coverage earlier in the week in The Times, and comes on the eve of the release of the Penn Report, commissioned through the Local Government Association in the immediate aftermath of the council’s financial collapse.
Inside Croydon received a leaked copy of the Penn Report last September and has been publishing extracts from it since. Our full Penn Report archive can be accessed by clicking here.
It is one of a series of independent reviews of the maladministration, mismanagement and questionable conduct of senior council officials in the years from 2015 through to 2020. These reviews include two Reports In The Public Interest from auditors, Grant Thornton.
But the Penn Report, according to the Daily Mail, is “the most incendiary”.
It was written in early 2021 by former local authority chief executive Richard Penn. Croydon Council’s chief executive, Katherine Kerswell, has had the report under lock and key for two years, ignoring and resisting all calls for its publication and for Penn’s recommendations to be implemented.
A meeting of the council’s appointments and disciplinary committee was convened at 10am today in Room 1.01 of Fisher’s Folly, the council headquarters The meeting would last more than five hours (including a break for lunch), with all but 30minutes of the meeting held in secret.
Kerswell has, finally, recommended publication of the Penn Report, but she has told the elected councillors who make up the committee that she will not allow any of its recommendations to be implemented, at least not until she has drafted yet another council paper and organised yet another meeting.
Penn recommended that some of Negrini’s senior staff ought to be reported to their professional bodies – CIPFA, the Chartered Institute of Public Finance and Accountancy in respect of its former Section 151 officer, Lisa Taylor, and possibly her predecessor, Richard Simpson, and to the Solicitors Regulation Authority for Jacqueline Harris-Baker, the former Monitoring Officer, the council’s most senior legal official.
In the intervening two years, external legal advisers Browne Jacobson and auditors Grant Thornton recommended similar courses of action. But still Kerswell stalls.
To compile his 160-page report, Penn interviewed council officials, cabinet members and councillors, council staff and some figures from outside the council. He discovered “organisational dysfunction at the most senior level”.
As the Mail reports today, “Staff who came from other councils say they were shocked at the way Croydon was run. One likened the town hall to the ‘Wild West’.
“There was a lack of transparency, interviewees claimed, bordering on cover-up… proper financial controls were not in place… inconvenient evidence, even from the council’s own legal department, was sometimes ignored… important paperwork was missing… failure was rewarded… democratic processes were not always followed.
“Too often those at the top also displayed an ‘almost reckless disregard of the potential adverse consequences of risk’.”
For her part, Negrini, now a director at Arup, refused to comment to the Mail.
But her former political boss, Tony Newman, the Labour leader of the council from May 2014 until he resigned in October 2020, did provide a statement.
“Things can go wrong without there being any wrong-doing,” Newman told the newspaper, having lost none of his old arrogance.
Although he has expressed regret for the council’s collapse when he was leader, Newman has never apologised to the people of Croydon.
Little has been seen or heard from Newman since he stood down as a councillor in March 2021. He has been on “administrative suspension” as a Labour Party member for almost two years, the issues identified in the Penn Report hanging over him like some local government sword of Damocles, with nothing happening to resolve the situation until Kerswell gets round to actioning the report’s recommendations.
In his statement, Newman said, “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.
“Things can go wrong without there being any wrongdoing. Indeed, Croydon has suffered from chronic underfunding for over three decades and the past few years of austerity have been especially tough… we were unable to weather it because of years of underfunding and austerity, which left us with very limited financial room for manoeuvre.”
The paper also notes that Newman has insisted in the past that there was no wrong-doing on his watch and that he and senior colleagues, who “acted at all times with honestly and integrity”, had been the victims of a “politically motivated witch-hunt”.
Because, of course, it was a politically motivated witch-hunt that saw him push through the above-asking-price purchase of the Croydon Park Hotel, and it was a politically motivated with-hunt which saw more than £200million-worth of council loans shovelled into the money pit that was/is Brick by Brick.
And it was a politically motivated witch-hunt which saw Newman himself choose to chair a previous appointments and disciplinary committee where the decision was taken to pay £437,000 to Negrini to encourage her to leave her post after a breakdown in trust between her and… Newman himself.
As the Mail says in its article today, “The Penn report is a terrible indictment of the standard of local government in some parts of the country.”
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“Things can go wrong without there being any wrongdoing.” So Tony Newman claims that Croydon Council became bankrupt by accident.
As any insurer will tell you re. road traffic accidents (RTAs), there has never been a genuine accident (where nobody was to blame), so they shouldn’t waste two syllables on the (inappropriate word) ‘accident’ and just have road traffic crash (RTC).
Like Saffron Towers, which was described by the Carbuncle Cup judges as having “a car crash of a facade”, when it failed to win the award in 2016, perhaps Croydon also has “a car crash of a council” ?
So what next Kerswell ? No action to be taken I guess
time to call in the SFO and some prosecutions ..
I agree with Tony Newman that “it would be wrong to attribute Croydon’s problems just to spending decisions”.
His incompetence, low intelligence, arrogance and cronyism are the other contributors to Croydon’s downfall.
He does protest too much as per usual. The problem for Newman’s defence is that nobody can come up in this debacle where he got anything right or acted with the utmost honesty and integrity. After over two years to reflect he still displays the same complete lack of insight about his behaviour despite the benefit of time.. If anyone can remember his social media account where he blocked the accounts of those who made the most mildest criticism of his decisions told you all you needed to know about his outlook and why this disaster happened on his watch.
Before being elected to the council Tony Newman earned a living as a street pollster/ clipboard guy.
Perhaps he should conduct a poll on the streets of Croydon and ask if we agree with his analysis. Wednesday 1st March outside the town hall at 6ish might be a good time & place to do that.
It is interesting that people coming from other councils remarked that Croydon was like the Wild West. That presumably means the culture at higher levels, but rot at the top seeps inexorably downwards too.
Were the top people able to bend others, including councillors to their will, by a sort of psychological / hypnotic /bullying process?……. akin to the pressures exerted by Ponzi, and the people involved in attracting new participants into pyramid selling organisations that –for example– sell things like cleaning products.
People were unable to call them out, for fear of losing face, or that they were unable to see through the hip management speak, and a measure of bluff, bluster and maybe— the fantasy.
The crew never mutinied– they soldiered on, hoping it would all go away.
Many have been laid off, good ones along with the less good.
No doubt this can happen anywhere, but where were the people operating the checks and balances?
Were they transfixed like rabbits in the headlamps?
It probably amounts to power relationships.
Not the exercise of Management– but of Power.
Lots of deep lessons to be learned, re-learned–and applied.
People did speak out, and paid the price.
Employees who blew the whistle were silenced and hounded out https://insidecroydon.com/2018/02/15/councillors-accuse-negrini-of-gagging-them-over-the-godfather/.
Councillor Andrew Pelling was expelled https://insidecroydon.com/2022/02/23/expelled-labour-councillor-lines-up-independent-campaign/
Kicking people out in this way serves two purposes. It removes the immediate threat to the corrupt rulers at the top, and teaches a lesson to everyone else that they’d better shut up.
It really makes for shocking reading.
Whether successful redress will ever be achieve is anyone’s guess?
Things can go wrong without there being any wrongdoing?
Of course – that is the nature of incompetence, failure to properly plan, failing to manage Risk, ignoring good advice, failng to budget or live within means – there are so many things that can go wrong in those circumstances.
But not reporting wrongdoing, not dealing with the impacts of wrongdoing failing to keep records or notes failing to do due diligence, Not following good practice to avoid getting caught bending process that is the minutia of administration or the lack of it!.
There is a vast difference between some tasks just not going right and the massive failures so far.
Whatever transpired, it already looks like one of Croydon planning departments ”perfectly legal developments” that transpire to be anything but perfect – anything but honestly legal and more of a construct to make it meet legislation/process and could hardly be described as a Development or improvement at all
But not wrongdoing? Perhaps someone can apply the magic retrospective planning and enforcement department to cover all of that shit up too – or just rewrite the process to allow it?
Really you could shovel buckets of disinfectant and pot pourri and it would still smell extremely nasty.
So just because something may not be according to statute illegal, or is permitted as the enforcing body allows it in that instance – for some convoluted reasons – this does not make it honest. It will still appear dishonest and therefore still look like wrongdoing.
Mr Newman is still in denial and continues to believe he and his cabal are just victims of circumstance due to Government Policy! He and his administration played fast and loose with public money without knowledge or support of the public. The public were clearly misled by Labour in many issues including the financial wrongdoing. But let’s remember his administration’s creation of slum housing and suffering of tenants and leaseholders. Finally still NO apology to the public! Shameful!
Newman has cost this borough dearly through countless botched decisions, giving jobs to mates as useless as he is and then this sneaky arrogance born from a ‘who-gives-a fuck- someone-will-bail-me-out’ attitude towards the public purse.
And he’s a mate of Steve Reed – the most useless MP in southern England.
When you are paying up to £450 extra on your council tax this year, remember this little fuck-wit and the dosey lummox who followed him.
An understandable inaccuracy there Glenda. Steve Reed is the second most useless MP in southern England.
I would like to hear his evidence under good cross examination ,given the fact he was at the council for many years . I do not understand how he was not aware of the numerous short comings of the council . This also applies to all staff. I simply cannot understand how no one foresaw the problems and if they did, failed to act . I 5 billion pounds is not petty cash so where is the money ? It is now time for the council officers at all levels be accountable and for the appropriate agencies to act to chase the money .Full disclosure needs to be made by the Council