EXCLUSIVE: The day after Jim McMahon, the local government minister, announced plans that could see Commissioners appointed to run Croydon, the £204,000 per year CEO issued a lengthy note defending her position.
Our Town Hall reporter, KEN LEE, obtained the confidential document
Katherine Kerswell was at her patronising and passive-aggressive peak on Friday, as she issued a 1,500-word briefing note to all council staff.
Kerswell’s missive simmered with resentment and defiance over the government’s announcement that it intends to send in Commissioners to run the council’s affairs after years of failure by the CEO and her leadership team.
The council’s £204,000 per year chief executive probably has most to lose over the announcement, made by local government minister Jim McMahon on Thursday, after he and Whitehall mandarins lost patience with cash-strapped Croydon and its “runaway” finances under Kerswell, which he said was creating yet another “financial crisis”.
Since she was parachuted in to Croydon in October 2020, after recommendations by her mates at the Local Government Association and approved by the then Tory government, Kerswell has been in the hot seat for the issuing of three Section 114 Notices of effective bankruptcy at Croydon – an unwanted national record – without any real sign of improvement, nor a solution to the council’s £1.4billion debt.
In March this year, the government approved the latest bail-out for Croydon, a capitalisation direction of £136million – another unwanted record.
Everyone else’s fault: Katherine Kerswell has been council CEO since 2020
The best plan that Kerswell and Tory Mayor Jason Perry have come up with has been to increase the borough’s debts to £2.2billion by late 2027 – proposals which the previously docile improvement and assurance panel installed in Fisher’s Folly described in its latest report to the MHCLG as “impossible”, saying that it would lead to Croydon Council’s complete “collapse”.
Knowing that a government announcement was coming on Thursday, Kerswell nonetheless spent the previous evening at a glitzy awards piss-up at a Mayfair hotel, where Croydon was up for the “Most Improved Council”, thanks to a nomination written by Croydon Council itself and approved by Kerswell.
What follows passes for Kerswell’s own version of events in the latest traumatic week for the council.
There is a strong sense of denial about Kerswell’s note, which shows how she intends, stubbornly, to refute the need for statutory intervention (the council has been given until June 25 to respond to McMahon’s announcement).
It begins with Kerswell posing the apparently rhetorical question: “What is happening at Croydon?”, a question many long-suffering residents have been asking, without staisfactory response, for years.
Government intervention Q and A: for staff briefings, contact centres and frontline staff as required – 13 June
What is happening at Croydon?
The government has announced on 12 June that they are ‘minded to’ appoint Commissioners at Croydon due to the council’s serious financial challenges, and invited representations ahead of a decision this summer.
No decisions have yet been made, and we are considering how we respond to the government and put forward our preferred option for working with them in future.
Does this mean that the government now in control of the council?
There are no changes to the council’s leadership, political or officer.
The Executive Mayor remains the political leader of the council and councillors are the elected representatives. Senior officers remain in post and continue to hold their statutory roles and responsibilities – for example, the Section 151 officer and the director of children’s services.
The government has not yet appointed Commissioners – the announcement is that they are ‘minded to’ and we will be responding to that.
Every council with Commissioners has a unique model to meet their particular needs and we do not yet know exactly how this will work in Croydon.
In the coming weeks we will be working closely with the government to understand their proposal for Croydon.
We will keep staff, businesses, residents and partners updated and provide more detail when we have it.
Why is the government doing this?
Since 2021, Croydon has worked with a government-appointed improvement and assurance panel. They were appointed after the council’s financial and governance collapse in 2020.
Since then, we have made good progress in improving our council [iC‘s italics, for emphasis]. This has been recognised by a wide range of partners, from our children’s services being rated ‘good’ by Ofsted, to the Regulator for Social Housing, the council’s auditors and the Local Government Association (LGA). Staff across the council have played a really important role in making this positive change for residents.
We have worked successfully in government intervention for several years and the government-appointed panel has not issued any directions, despite having the power to do so.
We have met 96% of the actions in our Exit Strategy – our jointly-agreed plan for the panel to leave Croydon this summer.
But Croydon’s financial position remains incredibly challenging, among the most difficult in the country.
We have been clear that the council’s financial challenges are so serious that we cannot meet the Exit Strategy requirements on becoming financially sustainable.
This is due to a combination of our historic debt, and the pressures that all councils are facing – with rising demand for our services, and extra costs in delivering them.
The government’s announcement is based on the improvement panel’s final letter, also published on 12 June.
While we understand that the government wants assurance that Croydon is delivering best value for residents, Croydon Council disagrees with the conclusions in the panel’s letter.
We have raised concerns with government over its content.
The council will be considering all options before submitting its formal response to the government.
What is Croydon’s response to this?
The Executive Mayor of Croydon, Jason Perry has issued a statement in response to the government’s announcement:
Mayor Perry said: “My top priority has always been to fix the council’s finances for our residents. We have done everything possible [our italics, again] to achieve this at a local level whilst protecting vital services.
Problem telling the truth: Jason Perry pockets £84,000 per year as Croydon Mayor
“Croydon Council has made savings of £167million over the last four years and will make £50million more savings this year. We have generated over £230million in capital receipts, including £130million of asset sales and have plans to sell a further £68million assets this year. The council also raised Council Tax by 10% over the cap in 2023, to help meet the panel’s demand that we close the gap in the council’s finances. We have a fully-funded two-year transformation plan to significantly reduce the cost of delivering our services. [Editor’s note: that transformation plan – meaning more cuts – is “fully-funded” in the sense of being paid for with huge amounts of additional borrowing]
“If at any time the panel or government felt that there was any action the Council should be taking, and was not, they had the power to instruct us. They never did [Editor’s note: this is what is generously referred to as a Perry porkie pie, also known as a lie].
“Surely that means we are doing everything possible, and they agree with our actions? We have already made very difficult decisions and in my view the residents of Croydon have felt enough pain [Editor’s note: Our italics. This is Perry gaslighting the entire borough, where he has inflicted the pain of 27% Council Tax hikes in two years].
“Despite all the improvements that have been delivered by the council and its staff, it appears the government wants to centralise control into the hands of commissioners.”
Mayor Perry has stated that he is not willing to support any cuts that would decimate local services [Editor’s note: that’s because he has already done that himself], nor is he prepared to break his promise to residents of no more Council Tax rises above the government cap [Editor’s note: after he had himself requested the 15% Council Tax increase in 2023].
What are the next steps
No decisions have yet been made – the government has said it is ‘minded to’ appoint commissioners, and invited representations.
This means that the council and others have an opportunity to respond, and we are preparing that response now.
We understand that the government needs assurance that the council is doing all it possibly can to meet its Best Value Duty to residents, and we welcome the opportunity to work with them on a solution on our finances.
We have worked with our government-appointed panel for several years. If at any time the panel or the government felt that there was any action the council should be taking and was not, they had the power to instruct us. We are pleased that this never happened [Editor’s note: this is a repeat of the untruth contained in Perry’s statement. The panel says that at one point, they were having to provide “advice notes” to Kerswell and her team on a weekly basis].
For these reasons, in our response to the government, we will be seeking to understand why they feel this is the right solution for Croydon, and putting forward our own preferred model for delivering this assurance.
Above all, we remain committed to working constructively with civil servants to get the council in a sustainable position, while continuing to deliver the services our residents depend on.
What does this mean for council services?
There are no immediate changes to council services bar those which have been announced.
If Commissioners are appointed at Croydon, and the wish [sic] to make changes, any changes to services would be subject to the usual consultation processes by law.
We are already delivering a huge amount of improvement and change as part of our transformation plans and this will continue. We will continue to involve and consult with staff, residents and partners on these as appropriate [Editor’s note: Perry and Kerswell’s plans for the current financial year involves another 10% cut in staff. This is in the same year that they awarded themselves pay rises].
What does this mean for my job?
It is important to remember that changes to staffing will be subject to the usual consultation processes – and that includes if commissioners are appointed.
We have already said that there will changes to the workforce through our transformation programme, and we will be continuing to work on these as planned.
Earlier this year at the request of our panel, we created a stabilisation plan to accelerate elements of the council’s transformation programme, Future Croydon, and to deliver additional savings of £27.3million this financial year [Editor’s note: that’s “additional” to the £23million cuts already planned].
These savings will come from some reduction in the workforce as we change the way we work. We will be working to reduce the number of staff naturally – such as by not replacing roles when people leave Croydon or retire. We will also be looking at reducing the number of agency staff we use and examining the cost of those contracts.
Kerswell’s cunning plan: the council’s Future Croydon document
The changes will create new roles and different ways of delivering some services that will mean there are opportunities for our staff to upskill and embrace what digital transformation can offer in the public sector.
We will keep colleagues informed and updated as we soon as we have more information about government proposals for Croydon, but in the meantime if you are concerned or have questions please do speak to your line manager.
What about Future Croydon?
We developed our Future Croydon transformation plan because we agree that the council’s finances are not sustainable [iC’s italics, for emphasis]. We want to become more cost-effective and efficient, while driving growth and investment in our borough.
These plans remain just as important as ever, and we will be continuing to progress our [sic] them at pace. However we have always been clear that, whilst necessary, Future Croydon will not solve the council’s financial challenges [iC’s italics, for emphasis].
What about the Mayor’s Business Plan?
The Mayor’s Business Plan remains our corporate plan, that sets our priorities and our service plans.
The plan is about transforming the council into one that delivers sound and sustainable local government services, and in so doing will transform our borough into one that Croydon residents can once again be proud to call home.
What does this mean for council contractors and partners?
Our arrangements with suppliers will remain subject to the same contract law – that doesn’t change, including if commissioners are appointed.
Read more: Panicked Perry admitted to Rayner: I can’t balance the budget
Read more: Kerswell’s ‘Stabilisation Plan’ has failed before it is approved
Read more: McMahon acts after serious concerns on ‘aspects of leadership’
Read more: Kerswell admits that council bail-outs are ‘not sustainable’
Read more: Borrowing plan would lead to council’s ‘collapse’ says report
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Using simple maths, 4.5 years of paying the Kerswell £200k per year adds up to Croydon Council wasting £900k on her, which is now more than 2 Negrediez (her payoff as she escaped scot-free was £437k, although she also “was paid” for 4.25 years of mayhem as CEO).
When did Croydon Council ever/last have a CEO/Town Clerk who “earned” the money they were paid?
The fact is that this CEO in addition to the main political parties have failed and failed again. Yet receive exorbitant salaries that do not reflect performance or achievements. The only group of Croydon Managers that deserve current salaries is in Housing where since the journey began in 2021 there has been steady improvement on a 10 year journey currently Tenant Satisfaction survey data shows 51% satisfaction and that is increasing in each quarter . I believe that the CEO should have a performance related pay structure along with her kabal also the Executive Mayor should have performance related financial rewards.
Performance-related pay for the Kerswell and Piss-Poor Perry? That would be fun, to see them receive nothing for their divisive and malevolent efforts, and then having to queue up with the (other) homeless people, who they clearly despise !
Kurzewell Reid’s delusions are clearly more important than the reality of the mess she has perpetuated and made worse for the residents of Croydon. She appears to think the debt she had added during her now four year term is not historical debt. Interestingly the residents in her pecking order of who she is responsible come after her Staff and Businesses. Her perception of responsibility may account for her inability to comprehend the unsustainable position she has directly created.
She has not done everything possible to pay down the debt. The council had the major asset of Shirley Park Golf Course at their disposal, but chose to follow the political preference of her Mayor and renew the lease at a future peppercorn rent. This historically with inflation will become a liability of lost income to the Council. Other Councils have bite the bullet and sold such assets.
Making a career out of brown nosing her local politicians has not prepared her for the stark scrutiny of other people who might happen to know what they are doing. Claiming that she has received no intrusive guidance when McArdle states that they have had to make weekly interventions is not going to cut much ice with McArdle’s employer.
It may make her employer Perry feel better and this whole exercise seems more about constructing a narrative of greivance rather than face up to the position that she has not made the Council’s finances sustainable. The best thing she can do is to go now and take her minimun statutory redundancy money (which will be a pretty penny) and save at a stroke more than she has managed for the whole of the last four years.
Perry’s hardly going to piss off his born-to-rule golfing chums is he? Chris Philp would go quite tonto! I guess Perry’s next move is to turn on the officers…
Kerswell and Perry are still in office but no longer in power . Effectively both are now lame ducks.They should do the decent thing and resign swiftly as all their improvement plans over many years have come to nothing.
And then what? All those calling for the heads of Kerswell and Perry have no suggestions about what to do next. Apart from, presumably, a workers takeover
Good idea Chris, glad you’re finally seeing the light. I can’t wait for you to join us in raising a flag over the Reichstag, oops, the Town Hall, and watch all the capitalist lackeys being marched out at bayonet point and forced to dig up each and every private golf course and turn them into collective farms, growing food for the hungry masses. All together now, “the people’s flag is deepest red…”
Has it been a hard day at the Radius Arms for Chris Myers? He seems unaware that this whole matter is about the Government Commissioners coming into run the Council. Only when Govt. is responsible for the debt will such matters as write off’s and debt holidays become a more realistic proposition. Anyway you must be gutted that your pin up Jason has become a political albatross for you old boy.
And then pay out what will likely be in the region of £250k for a mayoral by-election.
Very surprised and really annoying to hear the amount of money Mr Perry is on.He and Katherine has caused the people of Croydon a lot of grief and anger by raising our council and yet nothing significant has been done to improve the lives of people of croydon
Very, very incompetent they’re. Katherine has been around since 202 and nothing of importance has come out of her leadership to benefit Croydon residents. The idea of thinking of sending in Commissioners sounds promising
Very worried about the deteriorating of the WHITGIFT CENTRE as well
We are in a dire strait for every positive improvement of Croydon
Mr Perry and Ms.Katherine don’t deserve whatever they’re being paid or given in terms of bonuses
God Save Croydon
Does anyone else have the mental image of Perry and Kerswell frantically setting fire to documents while stuffing £50 notes into their briefcases before legging it out of the door?