CROYDON IN CRISIS: Another council legal action looks about to collapse – despite having landed the borough unnecessary bills worth tens of thousands of pounds. EXCLUSIVE by STEVEN DOWNES
Reward for failure: ex-council CEO Jo Negrini pocketed £437,000 on her departure in August 2020
Croydon Mayor Jason Perry’s forlorn exercise in “throwing good money after bad” in pursuing Jo Negrini, the council’s former CEO, to recover all or part of her £437,000 golden handshake, is about to be quietly dropped.
That’s the strong implication from a detail-lite public report by Katherine Kerswell, the current council chief executive, for the appointments and disciplinary committee that is due to meet next Monday, December 9.
Much of Kerswell’s “Update on the recovery of the settlement payment to the former chief executive” report is hidden away in the Part B report, which is withheld from the public.
But with the Metropolitan Police having abandoned its investigations into the circumstances which led to Croydon’s financial collapse in 2020 and the dodgy-looking £70million refurbishment of the Fairfield Halls, any argument that Negrini might be forced to return her pay-off because she had been in breach of her contractual responsibilities seems slimmer than ever.
The council’s case against Negrini had always been a weak one. The self-acclaimed “regeneration practitioner” had merely accepted a cash settlement offered to her by pankicked councillors and bamboozled council officials.
This despite widespread reservations over Negrini’s management of the council and her personal conduct towards staff.
The decision to pay Negrini the eye-watering sum out of Council Tax-payers’ money was taken by the appointments and disciplinary committee, also during a secret session, in August 2020.
One of the members of the committee that day was none other than Jason Perry, then a mere Conservative councillor.
More broken promises: Jason Perry was on the committee that agreed to give Negrini her ‘golden handshake’ payment in 2020
More recently, desperate to grandstand to his supporters, publicly Perry promised that he would take legal steps to recover the Negrini money.
“It is completely unacceptable that individuals who held positions of trust should escape the consequences of their misconduct,” Perry said last year.
“Nor should they be rewarded for their failures while our residents, businesses and partners continue to pay the price.”
This from the man who has hiked Council Tax by 21% since he has been in charge of the borough.
Now, his brash moves over the Negrini payment are exposed as the Quixotic mission of a buffoon – but one that has managed to cost the cash-strapped council tens of thousands of pounds more.
Perry gave the green light to pursue the Negrini payment 18 months ago, going against legal advice that made it clear that it would be “throwing good money after bad”.
Perry and the council’s lawyers hauled the Editor to the High Court in an attempt to get us to, err… unpublish it, but where a judge ruled that the council had already “let the genie out of the bottle”. Double doh! And at considerable unnecessary cost to residents.
The legal advice iC published had been provided by senior barrister Jane Mulcahy KC, and was included as an appendix to the minutes of a meeting of the council’s appointments and disciplinary committee held on April 27 2022.
Waste of time and public money: the council, and Perry and Kerswell, had advice that pursuing Negrini for her settlement payment would be ‘throwing good money after bad’
This 14-page appraisal of the legal position over the pay-off to Negrini considered whether the council’s former CEO had acted in breach of contract and, if so, what the prospects might be of recovering any of her pay-out.
In their Report In the Public Interest on the Fairfield Halls, auditors Grant Thornton had written, “Throughout the project there have been examples of a failure to discharge duties from a small group of senior officers (the then senior statutory officers and the then executive director of place).”
In Mulcahy’s legal advice to Croydon, she wrote: “In the case of the CEO, as head of paid service, one of her duties was to effectively manage senior officers.”
And she quoted from the RIPI where it states that Negrini and her senior officials “…did not ensure there was an appropriate legal basis for the engagement of [Brick by Brick] to carry out the works (by the licence and proposed land transfer) which would avoid legal challenge and enable proper scrutiny and oversight of the project and its costs; did not properly advise members about the independent expert legal advice received or act on that advice; did not secure adequate financial governance for the loans; did not formally and publicly advise members of the risks and changes to the project; and did not seek out proper formal authority from members for the expenditure.”
It is a litany of failures that has ended up costing the people of Croydon many millions of pounds.
Where did all the money go?: mystery surrounds where £70m was spent on the Fairfield Halls refurbishment, conducted by Brick by Brick under Jo Negrini
But overall, Mulcahy’s view was that pursuing Negrini for less than £100,000 would be counter-productive.
She has now been shown to have been correct, as Mayor Perry and his chief exec, Kerswell, are having to bow to the inevitable.
As Kerswell’s report to next week’s disciplinary committee reminds us, the Penn Report in 2021 recommended “a review of the settlement agreement that was signed by the council with the former chief executive and whether the concerns raised in this initial investigation constitute a repudiatory breach of her contract and thus a breach of the terms of the settlement”.
Kerswell deliberately delayed acting on that recommendation for more than two years, claiming that such an action might prejudice other cases.
The Mulcahy legal advice is not mentioned in this latest council report (as if!), which places much reliance on the findings of (yet) another report, by consultants Kroll, which Kerswell says provided “yet more evidence of a repudiatory breach by the former chief executive of her contract of employment”.
In a neat passing of a cold turd into the hands of elected councillors on the disciplinary committee, Kerswell notes: “The committee commented that it was in the public interest to begin legal action to recover as much of the settlement payment as was legally possible. In particular, taking legal action was a means of holding the former chief executive to account and restoring public trust and confidence in council processes.”
Kerswell fails to mention Mayor Perry’s part in all this, as the obstinate chair of the committee.
But the notion that this expensive episode will in any way “restore public trust” has taken a double set-back, for not only failing to deliver on the blow-hard promises of piss-poor Perry, but also for taking two and a half years to take on board Jane Mulcahy KC’s advice.
Not for the first time, the advice of the council’s in-house lawyers and the judgement of Kerswell and other senior execs has been called into serious question.
Read more: Council’s action over Negrini pay-off ‘looks dead in the water’
Read more: Council withdraws High Court case against Inside Croydon
Read more: ‘Better than evens’ chance of winning Negrini legal case
Read more: £400,000 ‘golden handshake’ is Negrini’s reward for failure
Read more: CEO Negrini’s long campaign to shut down Inside Croydon
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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
For once I’m looking forward to Mayor Perry’s weekly bulletin, due out on Friday. Plenty of time for him to comment about the news that iC has shared. My money is on him saying nothing
“Worth tens of thousands of pounds”? Not ‘worth 1p IMHO
Thank you Inside Croydon for continuing to expose and report on governance failure at Croydon Council.
This illusory narrative of it being a simple matter of recovering the losses from wrong doing managed to propel Perry into his role as DEMOC, but the cold reality is that he is from the generation of Croydon politicians of both ruling parties that were intregral to the mess that we are in. He has nothing to offer Croydon’s future as a legacy of the past. Croydon needs to move on from the people who created the problems and to find those who can provide solutions.
It is a long-forgotten fact, but it was a committee including Jason Perry that appointed Jo Negrini to her first job in Croydon, very possibly at the behest of Westfield.
And it was a committee on which Perry was a member that agreed to pay her the £437,000 golden handshake.
Perhaps someone would like to ask the mayor whether he would agree to publish the report received by that committee in 2020 after which the decision was taken to agree the payment?
Think we’ve already covered off that matter.
The meeting was not properly constituted:
https://insidecroydon.com/2022/12/07/negrini-pay-off-arranged-after-breakdown-with-leader-newman/
https://insidecroydon.com/2022/04/13/newman-and-negrinis-pay-off-no-papers-no-notes-no-reasons/
Thanks for the links, interesting reading and raises the question why any of those councillors participated in a meeting without insisting on receiving papers in advance, then accepted that the vote wouldn’t be minuted and finally agreed to the reasons being confidential.
Negrini award was nothing but reward for failure. Keswell got £420000 after 16 months. These payouts are disgusting when there are people they are supposed to serve who can’t put food on the table. If Negrini had any integrity she would do the right thing and give the money back. Her ‘regeneration practitioner’ sidekick on planning Heather Cheesborough should resign (again) and Scott, Butler et all should return everything they took from Croydon residents. But of course, none of that will happen.
Let’s hope there’s a change in the law that forces proper accountability and makes misconduct in public a realistic outcome in situations like these. And that the law is retrospective. It will have all of them running for the hills.
You say, ‘Kerswell deliberately delayed acting on that recommendation for more than two years, claiming that such an action might prejudice other cases’. It’s likely tho, as she is not a lawyer, that she took advice about prejudicing other cases. In which case she did the right thing.
It has been well-established, in fact, over a number of years, that the council’s in-house legal team is utterly useless.
Kerswell will know this.
Only lawyers who don’t know their law would ever recommend such inaction over separate cases for this reason.
Thing is, Kerswell presented this excuse at a series of council meetings, and – at least in public session – she was never challenged on this by any of our councillors.
I do not understand why so many readers are surprised. This is about contract law, nothing more.
In the absence of some form of misrepresentation of some sort by one of the parties, the money paid (or even some of it) was never going to be recovered. It is a long established principle in contract law that where both parties enter into a contract (in this case a compromise or settlement agreement) and both have received legal advice before doing so, no English court will revisit the terms of the contract in the absence of a significant extraneous factor, such as misrepresentation, by one of the parties.
The fact that too much money was paid to the recipient was entirely the Council’s fault which the Council must live with.
This was always going to be the outcome. Any half-decent barrister with a knowledge of contract law would have advised at the outset that proceedings to recover money would fail.
Other than as a performative exercise to demonstrate to Croydonians that something was being done, any further sums spent to bring proceedings was simply throwing good money after bad.
That’s pretty much the legal counsel’s advice which the council received, you and I paid for, Inside Croydon published, and Jason Perry ignored.
Yes, I know Inside Croydon. I am as disappointed as anyone that our Council saw fit to pursue this case.
All I can say is that I learnt this very basic legal principle at least four decades ago as a law student studying contract law. The basic principle is eons old and it has not changed in my working lifetime.
For the English courts to entertain a different outcome would change fundamentally the law of contract in the UK (contracts require “certainty” if they are going to work at all, particularly in business relationships).
Any diligent contract law student could have advised on the merits of bringing these proceedings
What does that say about the calibre of “lawyer” heading up the council’s legal department?
I am sure the Council’s legal department is staffed with some of the sharpest, brightest minds in the country.
Remember: it is trite to say that even if a lawyer advises a client that it would be unwise to pursue a course of action, that does not mean the client will follow necessarily their lawyer’s advice. Frequently clients do not do so. Personal experience has taught me that.
Greedy Negrini who spent her whole career in local government now describes herself as a ‘global leader’ on her LinkedIn profile. She has obviously learned nothing. Her globe spanning – nay universe spanning – ego bankrupted Croydon and shows no sign of diminishing.
Can you drop us an email please, Jess?