CROYDON IN CRISIS: The latest submission from government-appointed experts included a small error that added up to very big money – and no one in power noticed. EXCLUSIVE By STEVEN DOWNES
Flawed governance: the latest report to the Secretary of State from his experts appointed to run Croydon contained a significant error worth nearly £100m
The latest report to Michael Gove at the Department for Levelling Up from his appointed improvement and assurance panel about the “progress” being made at cash-strapped Croydon Council included a statement which suggested matters could be almost £100million worse than they actually are.
And no one in power noticed the mistake.
Gove nor any of his department ministers noticed. Not Katherine Kerswell, the £192,000 per year council chief executive, nor her assistant CEO or finance executive (all council figures will have been given sight of the report long before the mere public).
Nor Tony McArdle, the £1,000 per day chair of the “assurance panel” who had written the report. Nor any of the civil servants at the DLUHC which had received the report three months before they released it publicly. Nor did Croydon’s piss-poor Mayor, £82,000 per year Jason Perry notice the error before the letter was made public.
But hey, what’s a mere £94.8million when you are dealing with a basket-case local authority which has debts of £1.3billion?
Small error, big mistake: Tony McArdle
The devil is, as ever, in the detail, and in this instance, as avid council-watchers might suspect, the error made involved Brick by Brick, the council-owned housing developer which did much to bankrupt the borough. For once, at least, the failed housebuilders were entirely blameless.
It was only after Inside Croydon published our coverage on the findings in McArdle’s report last Wednesday that the gaffe in the official document was spotted by a senior council source figure. “I think that they have worded it a bit badly,” they said.
This website had reported directly from McArdle’s report. It had been submitted to the Whitehall mandarins last October, so plenty of time for DLUHC or McArdle’s well-paid panel of experts to re-read and proof the document and suggest a correction.
It only took one word, but through a transcription error or whatever cause, a £47.4million repayment by Brick by Brick during 2023 was transformed into a £47.4million loan to BxB, making a net difference to the council’s finances of £94.8million worse.
The report as published by DLUHC last week states: “The outstanding loan balance from BBB at the end of March 2023 was £103.9million, the council having made further loan and interest payments repayments [sic] of £47.3million during the year.”
“Having made”.
“The council” might have read instead “the company”. But it didn’t.
Since 2021, Inside Croydon has repeatedly requested to interview McArdle about his and his panel’s work in Croydon. They have been here, pocketing their generous day rates, for three years now.
Costly error: ‘I think he’s worded it badly’ was the understatement from the concerned senior council source
The DLUHC press office has never bothered to respond.
On this occasion, we asked the DLUHC if they could confirm that the wording in McArdle’s latest report was as he intended. The press officer responded by sending us a link to the same report.
We replied: we were very well aware of the report. But could they please answer the question?
This time, we included a screengrab of the specific passage that we had been told was entirely 180-degrees away from being correct.
A press officer rang. They didn’t understand. We pointed them to the passage, and asked them to refer to McArdle. We emphasised that the paragraph contained a mis-statement of the true situation at the council worth almost £100million.
Since when, we have heard nothing.
Hasn’t got a clue: gormless Michael Gove
But someone at the Department appears, finally, to have managed to get their head around the difference between a £47.3million repayment and an additional loan of £47.3million. The passage in McArdle’s seventh report to the DLUHC has been amended, and now reads: “The outstanding loan balance from BBB at the end of March 2023 was £103.9million, the council having received further loan and interest payments repayments of £47.3million during the year.” Our italics, just to illustrate what has changed.
It’s a small error. But it represents big money.
According to one Katharine Street source, “If someone working for private business, or working in The City, had issued a report with a £100million mistake like that, they’d be out.”
In this case, with government-appointed officials overseeing a local authority’s ailing finances, there has been no notification of the correction, nothing on the Department’s website to indicate changes have been made.
This is what a failure of governance looks like.
Tony McArdle and his now five colleagues, all on around £900 each per day, on the “improvement and assurance” panel have recently had their tour of duty in Croydon extended by a year, to 2025.
The long-suffering public, who have yet to witness any improvement and have received even less assurance, meanwhile, continue to pick up the tab.
Read more: Council loaned Brick by Brick additional £47.3m last year
Read more: Perry to preside over record-breaking 15% Council Tax hike
Read more: ‘An accountant could have foreseen this more than a year ago’
Read more: Mayor Perry: ‘It’s going to get worse before it gets better’
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