CROYDON IN CRISIS: After cuts to services of £137m in four years and with this year’s council budget out of control, official figures show that the council is spending millions more to find out how to save money.
EXCLUSIVE by STEVEN DOWNES

More for less: council CEO Katherine Kerswell

Payments by Croydon’s cash-strapped council to just three major firms of consultants, brought in to Fisher’s Folly this year to provide advice on how to cut costs, will amount to more than £6million – with more likely to be piled on later.

In one of the money-no-object deals, one firm of consultants has been paid £1.8million for less than six months’ work.

That’s according to official figures obtained from the council through a Freedom of Information Act request.

The spending has been sanctioned under something the council calls its “Future Croydon” plan, which promises “transformation” of council services. And for “transformation”, read more cuts to services and jobs in a final hollowing out of the authority’s functions.

The brainchild of council chief exec Katherine Kerswell, Future Croydon is supposed to deliver £100million of savings.

As council CEO, Kerswell is paid £192,474 per year to come up with ways of managing the organisation better.

Kerswell has been enthusiastically supported in her extravagant spending by Jason Perry, the elected Mayor who was effectively stripped of his executive powers by central government after he issued his own Section 114 notice, effectively an admission that he couldn’t balance the council’s budget. Instead, Perry asked government to let him hike Council Tax by 15%, which they did.

Kerswell’s cunning plan: the council’s Future Croydon document

Mayor Perry is still paid a council salary of £82,000 per year for what has been rendered a largely impotent role.

In a council report earlier this year, Kerswell and Perry said, “The Future Croydon transformation plan… seeks to radically change the way we deliver services for our residents and how we connect with our communities.”

It is, they say, all part of the Mayor’s “priorities” to cut another £100million from the council’s annual spending.

“Over the life of this plan our aim is to radically transform the way the council works,” they say, after having already cut £137million from council budgets between 2021 and 2024.

In typically civic bureaucrat bullshit style, the Future Croydon report says, “This provides the foundation on which we now need to pivot at pace from the very necessary concentration on recovery and building the basics of improvement, to the new radical transformation plan.”

Even as this “transformation plan” was being used in PowerPoint briefings to disillusioned and demoralised council staff in offices across the borough, while plans to close libraries were being railroaded through, the consultants were being handed their passes to Fisher’s Folly, to come and go as they please.

Among one of the consultancy teams’ first findings was that Croydon Council’s website was… errr… not very good. They said that the council website is “jargon-heavy”, “corporate” and “difficult” to use.

They suggested that maybe it could be improved by having an AI-powered ChatBot developed (at yet more cost to Croydon Council) to answer residents’ questions. Of course, a council contact centre entirely staffed by AI robots could only ever be accessed by residents who are actually plugged in to the interweb.

In June, Inside Croydon reported how one of the consultancies, Newton, were to be paid £1million for an initial six months’ work on finding more cuts in the council’s Adult Social Care and Health directorate.

This area of the council’s work is positively groaning under the increasing burden of greater demand, especially with an ageing population. Yet in the past three years, it has already cut £36million from its budget.

Newton are being brought in to cut even more from Croydon’s services for many of the borough’s most vulnerable.

As the council has itself said: “Ultimately the council has to spend less and, in so doing, will be able to do less.”

That usually means job cuts for the council’s lower-paid, front-line workers, while Kerswell hires more well-paid directors.

On Newton’s website, they say, “The volume and complexity of demand, coupled with shrinking budgets, can make it feel like there’s no choice but to reduce service provision.”

Consultants like Newton never come cheap.

When Conservative-controlled Norfolk County Council hired Newton recently to help find ways to make £2million-worth of cuts, the consultants were paid… £6.5million. And when Newton finished their work, they managed to find… £1million-worth of savings. Trebles all-round!

In an email to council staff, Kerswell wrote: “We’re embarking on one of the biggest, if not the biggest, transformation plans in local government and for that we need external help.” Staff members, on reading this, suggested that this was an admission by Kerswell that she and her large team of six-figure-salaried directors are not up to the task themselves.

“We have appointed Boston Consulting Group, a global firm with an expertise in digital innovation in the public and private sectors, to support the council over the next few months to develop a new operating model.”

Massachusetts-based BCG is regarded as one of the Big Three management consulting firms, along with McKinseys and Bain and Company. They have a fairly chequered record over their work around the globe. Not that such trifling considerations as human rights issues and use of off-shore tax havens is likely to bother Perry or Kerswell much.

It was Boston who did the “work” – if that’s the right word – on the council’s website and the way it interacts with residents.

The third consultancy recruited to enable Kerswell to do her job was Impower.

“Impower, experts in public sector change, will be supporting Children Young People and Education,” she emailed staff.

As with Newton, Impower’s track record working with local authorities, especially in the realm of “managing demand”, in their case for SEND – special educational needs and disability – has been less-than-stellar.

Suffolk Council spent £1.6million on hiring Impower between 2021-2023, but frustrated parents claimed the SEND service was the “worst it’s ever been”.

Referring to the three consultancy firms as “partners”, Kerswell wrote: “Our partners are all taking a forensic look at how we do things in their specialist areas, talking in-depth to staff, residents, partner organisations including the [voluntary community and faith sector] and will develop new ways of working.”

Only now have the figures been released for the work of Boston and Impower.

Unbalanced budget: Croydon Mayor Jason Perry seems unlikely to deliver on his savings targets, despite spending £6.4m on consultants

According to a council FoI response, Boston’s “was a 16-week fixed-price engagement ending on October 11”. For this, they were paid £1.8million. Averaged out, that’s a £5.85million annual contract. Council insiders believe that Boston may soon be back in Croydon to impart more of their expertise in transferring public cash into private business accounts.

For Impower, the bill works out to be slightly less eye-watering: “The spend on Impower across the 33 months is £3.6m[illion] subject to delivery of milestones, and to be agreed savings targets,” the council said in its FoI response.

The £3.6million over slightly more than two-and-a-half years for Impower works out at £1.3million per year.

With Impower’s £3.6million, plus Boston’s £1.8million, and Newton’s “initial” £1million, it all comes to a spectacularly flush grand total of …

£6.4million

And already, council insiders are suggesting that the £100million target for savings by this “redesign of the council” is unlikely ever to be achieved.

“We’ve set out our objective to become the most cost-effective and efficient council in London, putting our residents first and delivering excellent customer service – our partners will help us get there,” Kerswell told staff earlier this year.

“To become financially sustainable and offer our residents the best possible value for money, we need to reduce spending and do more with less. We know how hard you are working, and we are clear, from our conversations with you, that more incremental cuts are not the answer – quite simply, we must fundamentally change the way the council operates.”

Publicly, the council has justified their extravagant exercise by saying, “Some of the council’s costs, such as children’s and adults social care, remain among the highest in London. This is not financially sustainable for the future – and this is why the council needs radical change.”

But they issued that before the cost shocks of rising children’s and adult care spending, as well as steepling demand for temporary housing, had sent the council’s budget hurtling towards a forecast overspend.

Read more: From The Observer: ‘Scandalous’ £3.4bn UK state spending on private consultants last year
Read more: Council consultants take six months to discover the obvious
Read more: Complacent council managers miss important housing event

Inside Croydon’s ChatBot: In line with Croydon Council policy, and following the advice of Boston Consulting Group, no expense has been spared in installing an AI-powered chatbot for users of this website. It won’t work. It doesn’t matter how many times you click on it.

But hey, as we said, it’s in line with Croydon Council policy…

Inside Croydon – If you want real journalism, delivering real news, from a publication that is actually based in the borough, please consider paying for it. Sign up today: click here for more details

• If you have a news story about life in or around Croydon, or want to publicise your residents’ association or business, or if you have a local event to promote, please email us with full details at inside.croydon@btinternet.com

• As featured on Google News Showcase

• We offer FREE ads to community groups when they have members who are paid subscribers to Inside Croydon

• Our comments section on every report provides all readers with an immediate “right of reply” on all our content. Our comments policy can be read by clicking here

• Inside Croydon is a member of the Independent Community News Network

• Inside Croydon works together with the Bureau of Investigative Journalism, as well as BBC London News and ITV London

• ROTTEN BOROUGH AWARDS: In January 2024, Croydon was named among the country’s rottenest boroughs for a SEVENTH successive year in the annual round-up of civic cock-ups in Private Eye magazine