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
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).
Government intervention Q and A: for staff briefings, contact centres and frontline staff as required – 13 June
What is happening at Croydon?
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 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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