Auditors and Government both losing patience with Kerswell

CROYDON IN CRISIS: Judged by the ill-considered political posturing going forward into tonight’s full council meeting, the borough’s Labour councillors haven’t yet worked out who it was that bankrupted the borough.
By WALTER CRONXITE, political editor

Hall of mirrors: the amount of council cash ‘missing’ under the previous Labour administration in Croydon is now £269m

The conman is back. He is making more questionable offers of help to Croydon’s long-suffering Council Tax-payers.

Croydon Labour, the same people who bankrupted the borough, will be at the Town Hall tonight with a formal motion asking Mayor Jason Perry to let them have more of a role in running the council’s finances.

This from a party that, when they had the chance just three weeks ago to vote on part-time Perry’s budget, decided that they should abstain, offering up just a few stroppy remarks muttered resentfully into their sleeves as they acquiesced in increasing Croydon’s Council Tax by 15per cent.

They didn’t want to allow the Westminster Government to take over the running of the council, Labour said at the time. A week later, the Westminster Government announced it was taking over the running of the council, announcing a special intervention.

The timing of the Labour motion tonight is, as ever, poorly judged.

Since the last council meeting, the Government-appointed improvement board has reported that Labour’s legacy has ballooned to £269million of public money that has been “mislaid”, and cannot be accounted for.

This is £100million more than even the biggest estimates that got bandied around by candidates in last year’s Mayoral Election.

On report: Grant Thornton have placed the council on the naughty step again

Nothing much has been heard from the council’s external auditors lately. Well, not since Grant Thornton’s second Report In The Public Interest, in February 2021, which strongly suggested that there had been instances of fraud around the award of the Fairfield Halls refurbishment work to Brick by Brick, and its subsequent (mis)management.

As the council’s auditors, it is Grant Thornton’s responsibility to sign off Croydon’s annual accounts. Croydon now has three years’ worth of annual accounts which the auditors have failed, or refused, to sign off as a reliable record of the council’s finances.

So it was that, four days after levelling up minister Lee Rowley announced the Government intervention in Croydon, Grant Thornton roused themselves to issue a Section 24 notice.

For the uninitiated, a notice under S24 of the Local Audit and Accountability Act 2014 can be issued when an auditor decides written recommendations to a council are needed. Like when they can’t get their accounts signed off in a timely fashion.

Grant Thornton made eight recommendations to Croydon with their S24 notice on March 20, most of which have been derived in some part from their own RIPIs, from other external reviews, the Penn Report and from the Government improvement panel reports and intervention. The council’s latest S114 notice – the admission that they would be unable to balance the 2023-2024 budget – was another prompt for Grant Thornton.

Most of what they recommend the council should be doing, the council is doing.

It’s just that, with so many more experienced officials having taken redundancy, or with some departments under-staffed due to cuts, progress is glacially slow. In fact, given the rate at which the glaciers are melting these days, Croydon’s progress is even slower than that.

Slow going: improvement panel chair Tony McArdle

As Tony McArdle, the chair of the improvement panel, noted in his latest report to Michael Gove, all progress at Croydon under the current chief exec, Katherine Kerswell, is “Two steps forward, one step back”.

Some suggest that privately, McArdle reckons that probably over-states the pace of progress, and he is clear about who he holds responsible.

Most of the auditor recommendations seem pretty obvious. Things like: get your annual accounts signed off. They don’t appear to be in too much of a rush, though: Grant Thornton have given Croydon until June 2024 to finalise accounts which date back to 2019.

They also note, sternly, that lessons should be learned from allowing the discredited ex-leader Tony Newman to stuff £437,000 of hush money into the Gucci handbag of departing CEO Jo Negrini before she left Fisher’s Folly for a final time in August 2020. “Lessons”! “Learned”, no less. For which observation, the auditors win this week’s NSS* award.

But overall, the recommendations show in black and white just what a mess the council was left in by Labour.

Auditor recommendations: most of Grant Thonrton’s notes are obvious, and many are already being acted upon, just very slowly

The auditors’ recommendations give enhanced powers to the council’s scrutiny committee.

In one of the governance reforms introduced last year with the borough’s first elected Mayor was that the chairing of the scrutiny committee should be undertaken by someone from a different political party than the Mayor.

This was a pre-election promise and was granted on condition that the unreformed Newman numpty Sean Fitzsimons would not be the scrutiny chair. Fitzsimons chaired scrutiny from 2014, with allowances hiked to more than £40,000 per year under Tony Newman, and spent most of the time avoiding the mounting issues which were obvious to many. At least once, in a clear breach of protocol, Fitzsimons attended private Labour cabinet meetings to advise on how to deal with and dodge scrutiny.

Labour has jumped on a finding from the government’s independent improvement board that the Perry-run council is not meeting its Best Value Duty.

Inevitably, the Labour group has managed to misread the situation. Badly.

Get on with it: external bodies, like auditors Grant Thornton, lost patience with Croydon Council long ago. All of these recommendations might have been brought in last May

One of the recommendations to be adopted this evening looks to give powers to a Labour councillor to act as an “independent” overseer of council spending and governance, somehow separate from their party games. Labour are crowing about this and say that their involvement, and that of the Greens and the lone Liberal Democrat councillor, would “ensure the authority continues at greater pace”.

The Government, and now the auditors, just want the council to get on with it. “It is essential that the authority does not lose momentum in delivering the vital improvements that are starting to be made,” a senior Whitehall mandarin at DLUHC wrote earlier this month.

And it is clear that the Government is wary about what other horrors might be uncovered in the accounts next. In his letter, Max Soule, the deputy director for local government stewardship, said, “Given the scale of the challenges, the Secretary of State is concerned that further serious issues may be uncovered which could have a severe impact on the Authority’s ability to maintain and increase the momentum of the required improvements that they have started to make.

“This lack of assurance, as highlighted in the improvement and assurance panel’s latest progress report, along with the need to ensure necessary progress is ramped up further, is significant and the proposed intervention is necessary and expedient to secure compliance with the Best Value Duty.”

Now it’s just a hunch, but there are probably not very many Croydon residents who would feel relaxed about the Labour group, including several veterans from the bad old days under Newman, being given any control over the running of the borough’s finances again.

Insulted: protesters felt Labour tried to hi-jack their Council Tax campaign, and then let them down badly

Labour’s mask slips in their motion tonight. “This council recognises that all councillors have a role to play in ensuring that the council once again meets its Best Value Duty,” they say.

Inside Croydon has double-checked with Labour sources, and they confirm that this motion is not meant ironically.

The Labour motion is, just like the suggestion of the Freedom of the Borough for Stormzy, just showboating. Again. Just as in the run-up to the council’s 15per cent Council Tax hike in the budget, Labour was playing party political games without actually organising any worthwhile campaign or offering any real leadership.

Labour, under leader Stuart King, claim to aspire to running Croydon’s budget, but they had no proposals to change it when it was debated.

Campaigners against the Council Tax hike felt insulted when senior Labour councillors imposed themselves into the Town Hall protests, and they were furious when it came to the crunch, and 33 Labour councillors capitulated and abstained to allow Perry’s budget to pass.

Labour put out no end of letters to residents condemning the 15per cent tax hike, like that from New Addington North’s Kola Agboola, which reassured residents that, “Labour councillors will vote against the Conservatives’ massive council tax hike.” Oh dear.

Oh dear: Labour councillors will vote against the Conservatives’ massive council tax hike

While the Labour group pose for selfies on the doorsteps of voters, pretending the council’s financial collapse was nothing to do with them, residents have not forgotten.

Labour canvassers venturing out on door-knocking duties, armed with leaflets ostensibly opposing the 15per cent Council Tax increase that they allowed to pass, have been sent away with stern words from angry residents, such is the broad contempt in which Labour is now held in Croydon.

One New Addington resident posted Councillor Agboola’s letter on social media, saying: “I think it was Labour who got us in this mess ”

There is plenty on tonight’s council agenda to underline that view and the Government judgement that Mayor Perry is just too pedestrian.

Grant Thornton, who are at least supposed to be politically unaligned, say that they want the no-overall-control council to:

  • finalise the root and branch review of financial management in all service departments and in respect of corporate decisions as part of the Opening the Books exercise
  • resolve the accounting arrangements in respect of Croydon Affordable Homes [good luck with unravelling that mess!]
  • invest significant extra resource, when possible, in finance capacity, internal audit and risk management to ensure robust processes are brought into place to monitor progress and meet statutory financial obligations [a blunt indication that Kerswell’s cuts have gone too far, and that the council is unable to perform some of its basic functions]
  • demonstrate clearly to Council Tax-payers how the additional Council Tax for 2023-2024 has been properly controlled and demonstrates improvements in value for money arrangements [and that ain’t ever gonna happen]

The auditors recommendation for increased powers for scrutiny give the committee’s chair, Waddon councillor Rowenna Davis, a real alternative power base in the council.

Davis, who is on maternity leave, has already attracted compliments in her first 10 months as chair of scrutiny for the way she has conducted business in a non-partisan fashion.

The auditors’ further recommendations suggest that, 11 months into Perry’s Mayoralty, nothing much has actually happened.

“The Council should develop a comprehensive project plan for the improvement in governance arrangements to:

  • develop an action plan to clear the three outstanding years of accounts and audit by June 2024
  • develop and enhance governance process for all key investment decisions and develop a Panel to address the accounting implication of all capital investments
  • enhance existing officer control activities by ensuring the Scrutiny Committee approves the monthly budgets report from officers from a governance and control perspective
  • ensure that the lessons learned from the former CEO’s termination payments, as set out to Full Council in 2022, are applied to all future Chief Officer severance payments”.

And so, there we have it in March 2023, 28 months since Croydon was first forced to admit it was bust. There are now 34 Labour councillors, almost all of them lacking the simple self-awareness that this was all their fault.

Then there’s a Mayor and 33 Conservative councillors who are seen by their own party colleagues as being too slow to tackle the council’s challenges.

And there’s a team of senior council staff with whom the commissioners on the Government’s improvement panel lost patience some time ago.

For the poor, long-suffering Croydon residents, there’s no real prospect of any real change any time soon. There’s London elections next year, and probably a General Election, too.

But until May 2026, it looks like Croydon residents are going to be stuck with a part-time Mayor who’s too slow, an opposition group that is mostly too dim and a council that’s been so much reduced by cuts that it can’t even do what is required to reform itself.

* NSS? – it means No Shit Sherlock

Read more: Croydon put in special measures: ‘Worst of all possible worlds’
Read more: You can depend on Croydon Labour: they always let you down
Read more: Here’s the Mayor and 33 Croydon Tory councillors who THREE times voted in favour of hitting you with a 15% Council Tax hike


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  • ROTTEN BOROUGH AWARDS: Croydon was named among the country’s rottenest boroughs for a SIXTH successive year in 2022 in the annual round-up of civic cock-ups in Private Eye magazine

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This entry was posted in Council Tax, Croydon Council, Improvement Board, Katherine Kerswell, Kola Agboola, Mayor Jason Perry, New Addington North, Report in the Public Interest, RIPI II: Fairfield Halls, Section 114 notice, Stuart King, Tony McArdle, Tony Newman and tagged , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

25 Responses to Auditors and Government both losing patience with Kerswell

  1. Sarah Bird says:

    Thank you a good article .The auditors and Government are not the only ones losing patience. The comment made by Tony Mc Ardle .“Two steps forward, one step back”.is frankly in my view ,generous at best. Yet to see any improvement

  2. Zenon says:

    Well, these extra 20millions from council tax rise will pay 50% of yearly debt interest.
    I cannot wait till local election till next year, wish it was next month!

    • And who would you vote for? The incompetents that got us into this mess or the incompetents that can’t get us out of it?

      • Peter Underwood says:


        Croydon’s first Green Councillors were elected in May and people can already see that we stick to our principles. Greens voted against the 15% Council Tax rise, just as we said we would.

        Next time you vote, remember it isn’t just the same old two parties. There is a better Green option

  3. Part-time Perry should either devote himself full-time to clearing up this gigantic mess or resign and let somebody else take over the job who can put in the hours needed.

    Same goes for his Cabinet Members who are getting a lot of money for doing very little, if anything.

  4. £269 million now mislaid and cannot be accounted for? The Brinks Mat robbers only got away with £93.3 million at 2021 prices. This money must be found and if fraud is involved, those responsible must be prosecuted. £269 million is not far off one years Council budget! The residents deserve better, much better.

    • Phil Hickman says:

      David Wickens’ comments are spot on! With the stark realisation of what the 15% increase actually means now we have our Council Tax demands for the current fiscal year, the intensity of the scandalous and fraudulent activities are brought more into focus. The Penn report has done little to point any fingers at the culprits and it is outrageous that a proper criminal investigation has not already been instigated. It is appalling to be made aware that £269m of our money is “missing” and I for one would suggest we start a petition levelling our frustration at the “Authorities” both local and at Government level to get to the bottom of this as quickly as possible to try and appease the wrath of all the taxpayers in the Borough.

  5. Richard says:

    Surprised no-one has blamed the external auditors for the mess at Croydon? Seems like they were a sleep when things got bad. IC what about an article on their failings as I feel they are in this!
    By those set of recommendations?! A 10 year old could have come up with them!

  6. derekthrower says:

    The problem is that Croydon is not alone being in this parlous state. There are many who are just as bad and plenty of others on the verge.

    Reform and improvement has to come from the Central Government.

    This weekend Gove was in the media doing his usual act of rhetoric indicating that dynamic action is to be undertaken, but when push comes to shove these threats emerge without any the power of primary legislation to reform the disastrous mess local government has descended into.

    The whole underlying problem is that Central Government is the real author of this disaster and is simply incapable of facing up the scale of the disaster it has created with their localism agenda removing effective financial scrutiny of local authorities.

    • Sarah Gills says:

      I completely agree. Local government is not truly independent and therefore not ever going to be fully accountable to local residents. The truth is, local authorities are controlled and (are insufficiently) finance by central government.
      Central government stripped away the audit commission and put paper thin measures in place to protect residents. Not that that they’d ever admit it.

    • Local councils WANTED localism!

      • derekthrower says:

        Really. Would be really wonderful if you can provide a shred of evidence for this request of this campaign in local government since Cameron’s ideological fantasy of the big society and localism were accompanied by enormous cuts in funds for local councils. Don’t let the evidence get in the way of a fantasy.

  7. Lancaster says:

    To buy at Best Value you need two things. First a process that ALL staff and departments adhere to. Sadly there are still countless individuals and units within the council who buy outside the process and think they know best.

    Secondly, you need to know what you want to buy. This is probably the biggest issue within the council, and where suppliers will run rings around the procurement process. More often than not council buyers have little or no specialist insight about the products or services they need to order, so are unable to buy from the correct parts of the industry and market. This is where millions are lost each year in the public sector when spending.

    Products for the council were regularly ordered at £500 per order were reduced to £50 per order for the very same product once a specialist with industry knowledge took control of that procurement process.

    Once upon a time specialists used to be employed in departments. Now we seem to have a fug of mediocre general transferable skills sets that allow individuals to transfer and climb the organisation with no meaningful specialist knowledge or background.

    • You make a really good point about procurement; and it would behove Jason Perry to recruit a team soonest.

      I’ve been subject to the procurement process a few times.

      For ‘soft’ services, it’s a bit useless. For example, graphic design or photography doesn’t really have a unit price. It can be cheap, but it can also be crap – and you don’t find out until after the fact. Procurement bods can often struggle with anything where the notion of quality is subjective.

      But for widgets, gadgets and ‘hard’ services – mobile phone contracts, stationery supplies, utilities, vehicle fleets and so on – it can be absolutely brilliant.

      A good team inside Croydon (geddit?) would pay for itself in no time.

    • Maverick says:

      Totally agree with what you said, unfortunately in the Council today you have individuals who have no idea or experience what they are doing, however they still manage to climb up the gravy train

  8. Sarah Gills says:

    All of this dithering is simply because they won’t face up to the fact that the council actually needs more funding and a renewed management team across the board. It’s a huge council carrying out a massive range of activities. The staff there will be exhausted from being asked every 6 months to make savings, with no time actually crack on with their jobs.
    The council has a huge list of statutory functions and it’s not easy to drop those without a full assessment and who’s got the time to do that?

    • You make a very good point.

      Although it is also true that Ms Kerswell now has more staff at director level than Negrini did, and everyone thought she ran a top-heavy, empire-building operation.

    • Lewis White says:

      As an ex Local Government officer, I can personally attest to Sarah’s point above. Two of the three councils I worked for consecutively over 30 or so years indulged in constant reorganisations. This is demoralising, a source of constant stress, undermining of staff morale and motivation. Totally.

      The last one I worked for had a number of reorgnisations but tghey only came up every 5 or so years, and– in my department at least–these were well- organised and conducted in a clear and humane way . Why? Presumablly because the senior and middle management were decent and confident people.

      Regarding a point made by Lancaster above, procurement, my first council had purchasing sections in each major department who used to get quotations, in some cases annually, or as-and-when, for specific, one-offs. Normally a minimum of three, up to 5 or 6 for large purchases or projects

      They worked with us the officers needing the products, and specifying projects, to obtain best value , tendering to a range of suppliers. These were rotated, for fairness. It worked.

      In my last job, the council insisted on obtaining quotes in writing — normally 2 for low value ones, 3 for bigger ones, and full spec tenders for purchases over £60,000. The lowest quote should get the job– it is the responsibility of the specifying officer to write a tight spec. …and police it, every job, to ensure that the council gets what it asked for. You ascertain the capabilities of the company in advance, assisted by a purchasing “select list”.

      It is a fact that some tenderers get more jobs. If they provide the specified job, for the tender price, they should be awarded it, unless there is some flaw in their tender, in which case there are ways laid down to proceeed or withdraw. .

      There need to be safeguards in the tendering and quotation acceptance process, to ensure that public money is spent wisely, and without corruption.

      Quite how Croydon’s standing orders and purchasing guidelines or rules work, I have no idea as I never worked for them, but I suspect that some people have “waived the rules” and done the unforgiveable– not tendered through proper channels, and have given out jobs to mates, or people they would like as mates. To get rewards in kind–kudos.

      That is probably a sackable offence, and should be enforced as such.

      Honesty and probity are the foundation of local government, or should be.

  9. David says:

    There should be a deep and forensic investigation into what went on, where the money went and the people involved, Negrini, the people she brought on board, finance, procurement, the Councillors Scott, Butler, Newman and their cronies, the planners and developers. Like other residents I have received my massively increased Council Tax bill because we are paying for the millions of pounds of our money that was creamed off. No stone should be left unturned. Stop all the pussyfooting and ‘two steps forward and one step back’ and say what needs to be said. Kerswell has failed and too many people that were in receipt of public money and those that still are, need investigating. We are owed that.

    • Another one? We’ve had two RIPIs, a government rapid review, an independent investigation into housing, the Penn Report, consultants looked into Brick by Brick, and then Kroll.

      We know what happened. We know who did it.

      There’s has long been a sense that the bureaucrats running the council have hidden behind the various enquiries as an excuse for doing nothing.

      But there’s no criminal offence for incompetence.

  10. Billy James says:

    Looking at the council meeting earlier tonight Croydon must hold the Guinness world record for the biggest gathering of village idiots in one place

  11. SunitaK says:

    Kerswell must go.

    The Penn Report was an opportunity for Croydon to find out what had bankrupted its council and who was responsible.

    What does Kerswell do? She sits on the report and blocks its publication – for over Two years. She does this because it suited her personally – two high profile directors she had made redundant were accusing her of racism.

    It suited Kerswell not to publish Penn and she could not give a fuck about anyone else but herself.

    Does Croydon want a CEO who is being accused of racism? Who enjoys making people redundant so much she could not stop herself making more and more people redundant. It now transpires she has made too many people redundant and services cannot be fulfilled.

    Why are we putting up with this deplorable individual? Kerswell is underperforming on every level and must go.

  12. This saga has been going on for far, far too long. The longer it drags on, the more one wonders why there are these delays, and what further horrors will emerge.

    Should there be some form of independent enquiry set up to question (perhaps under oath) those who were in charge at the relevant time to get at the facts? The council tax payers of Croydon deserve answers – and with no further delay.

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