EXCLUSIVE: Correspondence released following this week’s announcement from Whitehall that Commissioners are likely to be sent in to run the council included a letter from the Mayor that admitted his failure to ‘fix the finances’. By STEVEN DOWNES
Under Mayor Jason Perry, the cash-strapped council has voted through unbalanced budgets in 2023, 2024 and in February this year, only keeping itself afloat with increasing additional borrowing from the government. In March this year, the government agreed to £136million in exceptional financial support for Perry’s basket-case council, the biggest settlement yet.
A report to government, dated April 25, from the improvement and assurance panel which has been overseeing the council’s conduct since 2021, advised that under Perry and his chief executive Katherine Kerswell, the council’s finances had become “runaway”.
Perry and Kerswell’s “plan” for recovery was to borrow tens of millions of pounds more, something the panel repport described as “an impossible position”.
Panicked Perry responded to the panel’s damning verdict in a letter to Angela Rayner, the Secretary of State for housing, communities and local government. The barely coherent note was written some time after the Mayor had sight of the panel’s report. But we cannot be sure exactly when: Perry failed to date his own letter.
Failure: small businessman and part-time Mayor Jason Perry has admitted he cannot ‘fix the finances’ at Croydon Council
The three-page document, which was accompanied by another self-serving seven pages of “briefing notes”, represents a desperate plea from Perry to be allowed to complete his four-year term in office.
But it includes a devastating admission.
“It is beholden upon me to state that without a solution to the council’s structural financial imbalance, the council will not be able to set a legal budget next year,” Perry wrote.
Such an admission of failure probably ought to have been accompanied by his resignation letter, as well as the resignation letter of his chief executive, Kerswell, who has already overseen three previous Section 114 Notices issued by Croydon when unable to balance its budget.
Perry’s grovelling letter is in marked contrast to his public statements in the past 48 hours since the MHCLG announcement about Commissioners for Croydon.
Perry must have hoped that his letter to Labour’s Deputy Prime Minister would do the trick. But none of his previous letters to government had worked, either.
Perry had spent the first two years of his Mayoral term negotiating with a Conservative government and an improvement panel which had been hand-picked and installed by the Tories. He needed to reduce Croydon’s £1.4billion debt.
It will cost Croydon £71million this financial year to service that debt, through repayments and interest. By Perry’s own reckoning, and under his own financial proposals, that debt bill could rise to £110million per annum by 2029.
Perry had wanted a debt write-off, unprecedented in the history of local authorities in this country. Tory governments, under Prime Ministers Boris Johnson and Rishi Sunak, and even under Perry’s own favourite, “Lettuce” Lizzie Truss, all refused Perry.
Unimpressed: Angela Rayner was not swayed by Mayor Perry’s appeal. If anything, she was given no alternative to act by his admission of failure
Perry’s latest rambling letter to Rayner has an increasingly desperate tone.
The Mayor claims to have delivered “three years of balanced budgets”, before adding the important rider that that was only possible “with the use of exceptional financial support”.
On top of the £167million of “savings” (he means cuts) already made, Perry offered up the jam tomorrow prospect of “a sector-leading Transformation Programme which will deliver over £56million in savings”. Meaning yet more cuts to services.
In his letter, Perry clutches at straws. “All external commentary on the council’s capability and consistency in delivering change has been positive,” he claimed, falsely.
Among his examples of “external” praise was Croydon “being shortlisted as the [Local Government Chronicle] ‘Most Improved Council’.” This represents a deliberate attempt at deceit by porkie-pie Perry.
Unmentioned by Mayor Perry in his letter to the minister was that Croydon Council had recommended itself for the award. Kerswell, the council’s £204,000 chief exec, actually attended the piss-up in a Mayfair hotel on Wednesday night in the knowledge that the announcement of government Commissioners being sent in would be made the following day.
Self-praise: Katherine Kerswell was at a glitzy awards event this week – as the government was preparing to send in Commissioners at Croydon Council
In Perry’s list of his own accomplishments was the piss-poor year as London’s Borough of Culture, which started late and saw the council frittering away grants of tens of thousands of pounds to business organisations (including one of which Perry is a director), while ignoring long-established arts groups.
Yet even Perry is forced to admit that he and the council’s execs had failed to meet the financial conditions of the “exit strategy” for the improvement panel, which was due to end its time in Croydon this July.
“We have delivered or remain on course to deliver 95% of the Exit Strategy by July 2025, with the council only unable to achieve the objective which sets the ‘council’s finances on a sustainable footing’,” Perry wrote.
“The fact remains, that without addressing our underlying financial imbalance, the council cannot achieve the firm base for reset ‘within its own means’.”
It is almost as if Perry was seeking to shrug this off as unimportant. “This is the only element of the Department’s Best Value statutory guidance that Croydon Council is unable to meet currently.”
Admission of failure: Mayor Perry’s letter to Angela Rayner left Whitehall officials with no alternative but to step in
After three years in post and with “runaway” spending and borrowing out of control at the council, Perry thought he’d suggest some new ideas to save his own arse.
“I am commissioning an independent review by an industry-leading consultancy,” Perry told the minister, committing to yet more spending of residents’ money on private consultants. The Mayor does not seem to understand that, by virtue of him making the appointment and paying the consultant, they could never be “independent”, nor objective. Or maybe he does…
He also suggested the establishment of “an external assurance board”. Which sounds very much like the improvement and assurance panel that has been in place, with no appreciable improvements, since 2021, “with a new cohort of individuals to support Croydon’s continuing improvement”. So same old shit, just with a different bunch of local government grandees getting up to £1,000 per day for their “expertise”.
“I would welcome the opportunity to pilot this new approach post-July,” Perry wrote. You can almost imagine Rayner or her Whitehall mandarins muttering, “I bet you would” as they read that particular offer.
And Perry’s third “Big Idea”? To be allowed to go it alone, submitting spending and borrowing reports to the MHCLG and the Treasury. “The independent assurance your department will still need could be fulfilled by a new appointed person to act as a ‘non-statutory improvement adviser’.” As we said, increasingly desperate.
Perry’s pleadings included his usual “as a proud Croydonian” line, though he stopped short of offering Rayner use of his season ticket at Selhurst Park.
He did warn us: Mayor Perry’s warning soon after taking office is just about the truest thing he has said
Desperate to cling to power, in the two days since the MHCLG announcement of Commissioners being sent in to sort things out, Perry has been issuing frantic emails and social media posts in which he tries to blame the Labour government which had just bailed him out with £136million exceptional funding.
But in truth, through Perry’s own admission of failure, local government minister Jim McMahon was left with no other option, as Perry stands accused by one local MP of “serious incompetence” and of being “an intolerable failure”.
Read more: McMahon acts after serious concerns on ‘aspects of leadership’
Read more: Mayor Perry: ‘Residents of Croydon have felt enough pain’
Read more: Borrowing plan would lead to council’s ‘collapse’ says report
Read more: Government sends in Commissioners to run Croydon Council
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