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Auditors and Government both losing patience with Kerswell

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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:

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:

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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