CROYDON IN CRISIS: It now emerges that the Met decided to take no further action over allegations of possible fraud or false accounting as long ago as June 2023. EXCLUSIVE by STEVEN DOWNES
No charges: the Met says there is insufficient evidence to pursue a misconduct in public office case against former council leader Tony Newman
There will be no prosecutions brought against any of the senior figures who were implicated in Croydon Council’s financial collapse in 2020.
That’s the conclusion of an official report to be discussed at a council committee next week, after the Metropolitan Police decided to take no further action against the likes of Tony Newman, the former leader of the council, and Jo Negrini, the chief executive who walked away from the wreckage with a pay-off of £437,207 from the cash-strapped council.
The no further action decision will come as a bitter blow to Mayor Jason Perry, and marks his latest failure to deliver on his manifesto promises.
But sources close to some former council figures who were subject to police scrutiny have told Inside Croydon that they regard the decision as “vindication”, after having a criminal investigation hanging over them for almost four years.
Others have questioned current CEO Katherine Kerswell’s decisions to commission a series of reports into the conduct of her predecessors, at massive public cost, when there was little likelihood of any prosecutions.
No charges: the Met says there is insufficient evidence to pursue a misconduct case against former council CEO Jo Negrini
Katharine Street sources say that the decision to drop the matter was “always inevitable” and “long overdue”.
They said: “There was only ever the remotest possibility of any prosecution ever happening. We all knew that when council chief exec Katherine Kerswell decided to seek charges of ‘misconduct in public office’: it is an offence that has an impossibly high bar of evidence to achieve, which is why you hardly ever hear of any cases being brought.
“In fact, it seems very likely that that is exactly the reason that Kerswell opted to go down that route – it always was going to be a legal dead end.”
Having delayed submitting a complaint to the police for more than two years, documents released by the council over the weekend show that Kerswell has been sitting on the police’s written decision for two months before getting around to sharing it with councillors and the public.
In her official council report, drafted for next Monday’s appointments and disciplinary committee, Kerswell says: “Having undertaken a forensic and extensive review of the information provided, and requested pre-investigative advice from the CPS [Crown Prosecution Service], the Metropolitan Police have decided to take no further action at this stage.
“The police have concluded that the actions and/or inactions of elected members [meaning councillors] and former officers [meaning council staff] did not meet the high evidence threshold set out in legal guidance for wilful neglect or misconduct, or abuse of the public’s trust to such a degree that the offence of misconduct in public office was capable of being made out.”
Waste of time and money: council CEO Katherine Kerswell
In early 2021, Kerswell was summoned to appear before a Commons Select Committee of MPs, where she was questioned about what had led to Croydon’s financial collapse. At the hearing, Kerswell expressed the view that the law was inadequate for bringing to justice those who may have abused their positions in local government.
The abandonment of the police case against all of the “Croydon Seven” only strengthens that argument, with Kerswell recommending that Mayor Perry should write to the government encouraging it “to take appropriate action to improve accountability arrangements in local government”.
The seven who faced possible police investigation were Newman and Negrini, plus Newman’s Labour side-kick, Simon Hall, the former council cabinet member for finance, and council directors Lisa Taylor, Jacqueline Harris-Baker and Shifa Mustafa, plus Hazel Simmonds and Guy van Dichele. All the directors were suspended from their jobs by Kerswell because they had been part of what was then called the “Executive Leadership Team”.
The 2021 Penn Report, commissioned by Kerswell to look into what led to the council’s financial collapse, had recommended calling in the police to investigate after it found what it described as “an almost reckless disregard” of potential consequences of the council’s casino economics approach to “investments” in the Croydon Park Hotel and Colonnades leisure complex.
Page-turner: Inside Croydon published the Penn Report long before Croydon Council did
Having commissioned Richard Penn, a senior Local Government Association figure, to conduct his investigation, Kerswell opted to sit on his findings for more than two years, claiming that she was unable to act for fear of prejudicing other cases and courses of action – which is now shown to be the spectacularly poor legal advice as was suspected all along.
Kerswell’s report to the committee of councillors follows a letter from Detective Chief Inspector Laura Riddell, of the Met’s specialist crime unit. Kereswell’s report is dated December 9. DCI Riddell’s letter was written on October 2.
DCI Riddell’s letter reveals that the Met’s detectives had “concluded that there was no evidence of false accounting or fraud” as long ago as June 2023, just a matter of weeks after being handed documentary evidence by Kerswell.
The council paperwork included the Kroll Report, another costly investigation commissioned by Kerswell, in this case into the botched £70million refurbishment of the Fairfield Halls, what the Met’s letter describes as “a particularly egregious project”.
The DCI also laid out the problems of trying to bring a prosecution for the offence of misconduct in public office. “As you may know Misconduct in a Public Office (MiPO) is a Common Law offence; it is not defined in statute. It carries a maximum sentence of life imprisonment.”
The police reckon that they sifted through 2,609 pages of documents, including two Reports In The Public Interest from auditors Grant Thornton, a rapid review from the Ministry of Housing, Communities and Local Government, a strategic review from PWC, the Penn Report and the Kroll Report, as well as other council papers.
“We also undertook other independent investigatory actions, which I am unable to expand upon here,” DCI Riddell noted, intriguingly.
Slow progress: it has taken Katherine Kerswell two months to share the Met’s letter with elected councillors
The CPS had already advised that misconduct in public office is almost impossible to prove and secure a conviction. And when the Met went back to them with the Croydon paperwork, the government lawyers “reaffirmed that negligence or incompetence are not sufficient of themselves to amount to [Misconduct in Public Office]”.
So according to this, Croydon Council was staffed and overseen by incompetents and buffoons, but not anyone who could be proven to be a crook.
“As a public servant, I have a duty to utilise resources in a responsible and proportinate manner,” the detective wrote in her brush-off letter. “Given the volume of material in this case exceeds millions of different documents including emails, any resulting police investigation would have the potential to last several years… I have decided that police will take no further action at this stage.
“I cannot initiate an investigation of this scale and nature in the knowledge that it is highly unlikely to result in a positive outcome.”
DCI Riddell added that “if further evidence comes to light, it will be duly considered by the police”. Which is nice.
In her report to councillors on the disciplinary committee, Kerswell emphasises, “It is of note that the assessment conducted by the police revealed potential wrongdoing, breaches of statutory duty and incompetence. That, of course, is a matter of public record already.” Although no real thanks to Kerswell.
“The police, however, consider these to be ‘collective failings as opposed to individual instances of MiPO’.”
So four years, thousands of pages of reports and hundreds of thousands of pounds (at least) of public money later, and despite all the firm words of determination to seek action and justice, the people of Croydon are no further forward.
Read more: Negrini’s £437,000 pay-off: who is going to pay it back?
Read more: Newman breaks his silence to tell Mail: I did no wrong
Read more: The ins and outs of quietly getting rid of a council CEO
Read more: CEO Negrini’s long campaign to shut down Inside Croydon
- 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
- 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 works together with the Bureau of Investigative Journalism, as well as BBC London News and ITV London
