Government-appointed bureaucrats taking over the running of local level services happens only in ‘very exceptional circumstances and very much as a last resort’ according to Whitehall guidance
Since 2020, following Croydon’s first Section 114 Notice issued that November, a number of other local authorities have fallen into financial difficulties, with the government opting to use the powers available to it to intervene in the management of those councils, with the appointment of Commissioners to oversee how services are run.
Until today, Croydon had managed to avoid such a full-scale intervention.
In February 2021, the Ministry of Housing, Communities and Local Government (or whatever it was called at that time) appointed what they called an “improvement and assurance panel”, chaired by Tony McArdle, which had an advisory role, and reported back to the ministry, initially every three months. But the borough’s elected politicians, and the council’s executives, continued to be in overall control, albeit under supervision.
‘Fixing the finances’: in 2023, after issuing Croydon’s third S114 Notice, Jason Perry got permission to hike Council Tax by 15%
In 2023, after Mayor Jason Perry had issued Croydon’s record-breaking third S114 Notice and had his request to hike residents’ Council Tax by 15%, the improvement panel was given additional, statutory powers, providing even closer supervision of the way the council managed itself.
Since late 2024, with senior council chiefs declaring Croydon’s finances to be “unsustainable”, Croydon has effectively been operating under S114 restraints once more – no discretionary spending, and a recruitment freeze.
The new Labour government sought to avoid running the red flag of effective bankruptcy up the mast, as they looked to manage an emergency situation with other councils in similar distress across the country.
After almost five years, a £136million government bail-out of “exceptional financial support” in February 2025 and CEO Katherine Kerswell’s feeble “Stabilisation Plan” last month, Whitehall mandarins have been left with no alternative. All plans for the improvement panel to exit Croydon in July have been binned.
The Local Government Act 1999 gives the Secretary of State for the MHCLG the power to send in Commissioners to take over some council functions. In the decade to May 2020, just four councils – Doncaster, Tower Hamlets, Rotherham and Northamptonshire – were subject to such intervention. Doncaster’s intervention lasted longest, with Commissioners in charge of local affairs for four years.
Liverpool, Slough, Sandwell, Birmingham and Nottingham City Council have all been run by Commissioners since 2021.
A guidance note from the department in May 2020 emphasised that these powers were used in only “very exceptional circumstances and very much as a last resort”.
When are commissioners appointed?
The Local Government Act 1999 gives the Secretary of State the power to send in Commissioners to review and manage all or some council functions where evidence has emerged that a council is falling short of its best value duties. This includes any indication that a council is unable to deliver a balanced budget.
The role of commissioners
Councils can experience different levels of government intervention and different Commissioners can be appointed to support improvements or temporarily run the services of different council departments.
Commissioners are usually former council chiefs with lengthy experience in local government, but their role varies and depends on the specific difficulties being faced. The authority of appointed Commissioners can be specific to a particular function or wide ranging, and can include a number of functions such as strategic decision-making, financial management, performance management of senior officers and all functions associated with a council’s operating model.
Interestingly, Commissioners can have powers to appoint or dismiss of statutory officers, including the head of service (the chief executive) or the Section 151 officer (finance chief).
Commissioners will often oversee the implementation of improvement plans and amended budgets, with councils being accountable to the Commissioners on their delivery. But in most respects, that has already been the situation in Croydon, with the improvement panel, since February 2021.
The role of councils following the appointment of commissioners
Commissioners are allowed such assistance, information and access to amenities, services and any administrative support that is reasonably required to carry out their functions and responsibilities.
The intervention of Commissioners and the increased level of scrutiny this brings will not always be well received.
Commissioners do have statutory enforcement powers and executive decision-making powers. Such powers have been used where needed in the past.
The role and level of authority exercised by Commissioners will be unique to the difficulties being faced by any council.
Read more: Government grants Perry’s record £136m council bail-out plea
Read more: Kerswell’s ‘Stabilisation Plan’ has failed before it is approved
Read more: Council Tax hits £2,500 per year as debts continue to mount
Read more: Cash-strapped council has spent £6.4m… to make more cuts
Read more: Mayor Perry busts his unbalanced budget with £42m overspend
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Does this mean Croydon Council’s finances will finally “get fixed”, or does it just mean more pigs at the trough, with Government commissioners now joining the ineffective “improvement panel”, as well as the council’s councillors and staff, and Croydon’s downward spiral will simply accelerate ?!
Unless the government decides to write off the debt entirely and dramatically increase funding to Croydon I can’t see what difference this is going to make.
Of course if they did do that, they’d have to do the same for all the other local authorities who are on the verge of the same kind of financial collapse.
Nutshelled magnificently, Yusuf.
Except the amount to be written off, to release the burdonsome debt, need not be the whole £1.4bn.
If the commissioners fail, what happens next?
Was there improvement in the Councils where the Commissioners were sent in ?
Thanks for your explanation of the role and powers of the imminent Commissioners.