CROYDON IN CRISIS: Yesterday’s meeting of the cash-strapped council’s disciplinary committee may have committed Croydon to tens of thousands of pounds of additional legal costs, with no guarantee of any success in the cases which might eventually be brought. And the chief exec has pretty much admitted as much.
By WALTER CRONXITE, political editor

After delaying the publication of the Penn Report and the implementation of its recommendations for more than two years, Katherine Kerswell, the council’s go-slow chief executive, yesterday lectured elected representatives on how she was, at last, going to allow them to take the steps which the public has been demanding since at least 2020.

Who’s really in charge?: council CEO Katherine Kerswell has again demonstrated her control over Mayor Jason Perry

For long sections of yesterday’s disciplinary committee meeting, the public and the press, and even other councillors, were denied access to the detail of what was being discussed. Kerswell and her lawyer sidekick, Stephen Lawrence Orumwense, determined that much of the session should be held, in councilspeak, in “Part B”. Or in secret.

And this session was supposed to be about accountability, or the lack of it.

So while Mayor Jason Perry hoped to win the adulation of the Croydon public for giving the green light to the hopeless task of clawing back the £437,000 settlement that was paid to ex-CEO Jo Negrini in 2020, Kerswell was using this meeting to put a marker down for some legal reform to address the serious absence of real accountability that has existed in civic service for all of this century.

Kerswell, better than most, knows that if some backroom deal is carved up that sees elected representatives signing off on payments of hundreds of thousands of pounds to council execs who have out-stayed their usefulness, there is virtually nothing that can be done to prevent it or recover the public cash.

The outrage in Croydon over the Negrini pay-off was matched in Kent in 2012 when their Conservative-controlled county council decided to make its managing director redundant after just 16 months in the job, and paid them a stonking settlement of £420,000.

Headline news: how another senior council exec’s £400,000-plus pay-off angered residents in Kent

The name of that fortunate civic servant? Katherine Kerswell.

Official figures show that in that financial year, with salary, pensions and all the other add-ons and perks that senior employees of local authorities enjoy, Kerswell was paid a total of £589,000.

So not far short of the £613,895 total paid to Negrini by Croydon in financial year 2020-2021 that got the Tax Payers’ Alliance and Daily Mail frothing at the mouth.

Which might explain why early in yesterday’s agenda, Kerswell had inserted a section to discuss a report, the oxymoronically titled: “Accountability in Local Government”. It represents an unusually broad topic for a small committee of a borough council. Perhaps Kerswell fancies a day at Buck House for an investiture of some kind to recognise all her long years of public service?

In her usual, deathless prose, Kerswell’s patronised the councillors she is supposed to serve by telling them that her “report was to describe the current system of accountability in local government to inform the committee’s deliberations on the decisions before this committee today and to ensure that all avenues of holding those responsible have been fully considered and taken account of”. Sic.

Kerswell’s report included six recommendations, which the five councillors on the committee plus the borough’s witless Mayor all nodded through unanimously. Callton Young, himself a council cabinet member (albeit briefly) under Tony Newman, asked that it be noted that this was a cross-party motion. So Labour as well as the Tories do Kerswell’s bidding.

Significant among the recommendations was 2.4.

That the committee “agree that the Executive Mayor, as chair of this committee, write to the Secretary of State at the Department for Levelling Up, Housing and Communities requesting that Government consider the inadequacy of current arrangements in respect of the formal accountability for conduct in public office, and urgently put new arrangements in place to remedy this so that residents in other local authorities are protected and spared the scale of costs and damage to services that have befallen Croydon Council and its Council Taxpayers”.

There’s no reading between the lines necessary. After two-and-a-half years in her role, Kerswell was sending a message to anyone who was paying attention that it is not her fault no disciplinary action has been taken against any of those responsible for crashing the borough’s finances.

Headline news 2: 10 years after Kerswell’s pay-off, and the mainstream media starts to wake up to the scandals in Croydon

And in presenting her report, Kerswell laid it on with a trowel about just how bad the jokers and incompetents who preceded her truly were.

“The council has been forced to ask government for permission to borrow £369million just to balance its budget and is having to pay an annual sum of £66million simply to service its debt of £1.6billion.”

In the space of a month, since the council published its budget papers for 2023-2024, the debt servicing sum has soared from £48million per year.

And interest rates were increased by the Bank of England again yesterday.

That unprecedented half-billion debt write-off that Kerswell has asked her chums in Government for cannot come soon enough.

Kerswell told the meeting, “Residents are suffering from reduced council services and increased costs, and staff are having to work in very difficult circumstances.”

Kerswell chucked in everything available to her, going back to that first Report In The Public Interest from the auditors in October 2020, which found “collective corporate blindness to both the seriousness of the financial position and the urgency with which actions needed to be taken”.

Problems with accountability: the recommendations in Kerswell’s report amount to an admission that Croydon’s CEO does not think there’s much chance of bringing those responsible to account

Then there was the clusterfuck of the Fairfield Halls. “Throughout the project there have been examples of a failure to discharge duties from… the then senior statutory officers and the then executive director of place.”

It is as if they can’t bring themselves to mention those responsible by name: the exec director of place was Shifa Musthavefridaysoff, who somehow managed to be a director of Brick by Brick (who were handed the task of refurbishing the arts centre) while also on the board of the Fairfield Halls, while also overseeing council business in her day job – like the £200million of loans to BxB. The Negrini appointee never once twigged that there might be a problem with this tangled arrangement.

As one senior council figure confided, “Incompetence and stupidity have never been criminal offences.”

And to think that, in the maelstrom that was Fisher’s Folly in the immediate aftermath of Negrini’s hurried exit, Newman was about to install Mustafa as the council’s interim CEO.

Between 2016 and 2020, Croydon spent nearly £67.5million on the Fairfield Halls refurbishment – the budget was £30million – but “did not ensure there was an appropriate legal basis for the engagement of Brick By Brick to carry out the works”, Kerswell said.

‘Failure to discharge duties’: ex-exec Shifa Mustafa

There was no contract, no competitive tendering. It was, in short, a stitch-up, largely arranged so that the refurb could be funded out of proceeds from the sale of flats built on an adjoining site… the only problem with that was that the incompetents at Brick by Brick never actually bought the land that was needed.

Kerswell continued with her speech, in which for the first time for a while, the role of Alison Butler, Newman’s deputy, was mentioned explicitly.

Kerswell said, “The senior officers [meaning council staff] were responsible for reporting to the then the portfolio holders [meaning council cabinet members] for homes and gateway services [meaning Alison Butler], for finance and resources [Hall] and the leader [Newman] who were either not briefed by officers and failed to request briefings on the project or did not take effective action in response to concerns raised by the senior officers.”

This failure to brief cabinet members over the Fairfield Halls places Richard Simpson, the erstwhile finance director, in the frame. Simpson these days runs the finances for that other paragon of local authority conduct, Sutton.

When Croydon did seek external legal advice over the contract status of Brick by Brick for the Fairfield project, council officials failed to pass it on to councillors, or act on it, and as auditors Grant Thornton said in their second Report In The Public Interest, the council did not secure adequate financial governance for the loans.

Moved: Richard Simpson, once of Croydon, now at Sutton

Those in charge – Negrini and her senior execs – did not seek proper permission from elected councillors for the expenditure.

Kerswell said that Croydon’s problems did not stem from “simple errors” but from seven years of trying to follow a set of strategies, “which did not pay sufficient regard to governance, risk management and internal control when advising members and spending taxpayers’ money”.

Kerswell said that the “catastrophic” collapse of Croydon’s finances and governance showed that there is a case for reviving old rules, the District Auditor and surcharging, which “modernising” governments under Bliar and Cameron swept away as unnecessary.

“Sanctions and surcharge regimes for councillors did exist in the past which gave opportunity for further thought before decisions were made as there could be personal consequences,” Kerswell said.

“Now nothing of such weight exists and certainly nothing that prevents the act occurring. Any penalties that can be imposed are all after any damage has been done.”

And if this report does actually lead to some necessary and overdue reform, maybe there will be a case for “Arise, Dame Katherine”.

• Read Kerswell’s report on accountability (or the lack of it) here

Read more: Councillors agree to chase Negrini for golden handshake cash
Read more: MP calls for misconduct charges against ex-councillor Hall
Read more: All you ever need to know about ‘misconduct in public office’…
Read more: Penn Report wanted police probe into possible misconduct
Read more: Cover-ups and denial over Brick by Brick failure

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