EXCLUSIVE: With no real solution in sight, and the appointment of government Commissioners getting ever closer, sending patronising memos to Whitehall seeking to blame everyone but herself probably wasn’t the shrewdest move by the £204,000 per year council chief.
By WALTER CRONXITE, Political Editor
Mayor Jason Perry is coming under increasing pressure to sack his £204,000 chief executive, Katherine Kerswell.
That’s according to senior Katharine Street sources, who understand that government officials are massively underwhelmed with cash-strapped Croydon Council’s shambolic response to their notification that Secretary of State Angela Rayner is “minded” to send in Commissioners to take over the running of the council.
Dismissing his chief executive presents Perry with a massive risk of what some at the Town Hall are calling “the Negrini Conundrum”: unless Croydon’s Mayor can make a case for gross misconduct by Kerswell, the cash-strapped council could be forced into having to make a severance payment of potentially of hundreds of thousands of pounds.
Perry came to office in 2022 promising to claw back all or part of the £437,000 “golden handshake” paid to Kerswell’s predecessor, Jo Negrini, in August 2020, just before Croydon Council issued its first Section 114 Notice of effective bankruptcy. But Perry never recovered a penny of the money paid to “Negreedy”.
£437,000: might Katherine Kerswell succeed Jo Negrini in more ways than one, and leave Croydon with a massive pay-off?
Having hiked Kerswell’s salary by £12,000 per year as recently as February this year, Mayor Perry may struggle to find due cause to dismiss the CEO and avoid an expensive pay-off.
This despite Kerswell having now overseen three S114 Notices, record high levels of Council Tax, “runaway” spending at the authority and the possibility of Commissioners doing her job for her.
Kerswell is notorious in local government circles for ensuring that she has been very well “compensated” when eased out of previous high-level jobs.
In December 2011, Kerswell was made redundant from her managing director’s job at then Conservative-controlled Kent County Council, receiving a near-Negrini level of pay-off at £420,000 after just 16 months in post.
The Kent Messenger reported that the County Council “never fully explained the full background to Ms Kerswell’s departure or accounted for why she was given a £420,000 payout…
“There were rumours that she had fallen out with the Conservative administration.”
It has happened before: the 2011 pay-off angered residents in Kent
Kerswell arrived in Croydon in the aftermath of Negrini’s rushed departure in the autumn of 2020, initially as an interim appointment for 12 months at the suggestion of her mates at the Local Government Association and with the approval of the then Tory government.
Kerswell was handed the Croydon job permanently in May 2021. She was the only interviewee.
Sources at the council suggested that Kerswell had written the chief exec’s job description and requirements herself, making her a unique fit for the post, though this has never been formally confirmed.
Before being parachuted in to Croydon, Kerswell had just spent five months working (largely remotely) as interim CEO at Nottingham City Council, following work as interim head of service at Newham from August 2018 to April 2019. “Until she came to Croydon, Katherine had rarely stayed anywhere long enough to be found out,” a council source told Inside Croydon.
Concerns over leadership: Jim McMahon, local government minister
Kerswell may have been found out this time around.
As Inside Croydon reported last month, “The council’s £204,000 per year chief executive probably has most to lose over the announcement, made by local government minister Jim McMahon… 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’.”
Croydon’s debt burden has remained stubbornly at £1.4billion to £1.5billion throughout Kerswell’s tenure of her seventh-floor office at Fisher’s Folly.
In March this year, the government approved the latest bail-out for Croydon, a capitalisation direction of £136million – more than any other local authority, bar one, another unwanted record.
Totting up all the Emergency Financial Support given to Croydon since March 2021 at £553million, McMahon said: “This is simply not sustainable.”
Yet the best plan that Kerswell and Tory Mayor Perry have come up with has been to increase the borough’s debts to £2.2billion by late 2027 – proposals which the improvement and assurance panel described in its latest report to the MHCLG as “impossible”, saying that it would lead to Croydon Council’s complete “collapse”.
McMahon’s original notice had expressed serious concerns about “aspects of leadership” at Croydon. Who could he have had in mind?
In among all the various pieces of correspondence flying back and forth between Fisher’s Folly and Marsham Street was a direction addressed to Kerswell on June 12 from James Blythe, the deputy director, “local government stewardship and interventions” at the Ministry of Housing, Communities and Local Government.
This letter laid out in simple terms for Kerswell what she was to expect as the government pondered whether or not to send in Commissioners. And it also said: “You will wish to reflect on the impact the proposed intervention package could have on your improvement plans and the way you would work with Commissioners moving forward.”
To many, that appeared to be clear Whitehallspeak for Kerswell to consider her own position.
Never taking responsibility: CEO Katherine Kerswell has yet to resign
Yet Kerswell still doesn’t get it.
In her reply to Blythe last week, Kerswell (advised, no doubt, at significant public expense by Stephen Lawrence-Orumwense, possibly the worst Borough Solicitor in the history of borough solicitors) sought to explain the law to Whitehall and its army of Treasury counsels, who will have been all over Croydon’s numbers for several months.
After years of patronising Croydon Council’s staff, Kerswell now sought to patronise the Deputy Prime Minister, the very well-advised Angela Rayner, the Secretary of State at MHCLG.
“It is essential for the Secretary of State to bear in mind that her powers under Section 15 of the Local Government Act 1999 only come into operation where she is satisfied that that [sic] an authority is failing to comply with the requirements of Part I of the Act,” barrack-room lawyer Kerswell wrote last week.
“It is not clear from your letter in what respect the Secretary of State believes that to be the case.” Oh dear…
Kerswell’s response continued in that condescending vein, as if she was a headmistress at a small prep school who had marked the Ministry’s homework in red ink, including a three-page critique of the latest report to government from Tony McArdle and her previously close colleagues on the improvement panel.
Croydon’s response to government, delivered last Wednesday, read like “a pathetic plea from a spoilt teenager not to have their mobile phone confiscated”, according to one Katharine Street source.
Even the letter sent by Perry, council insiders observed, “had Kerswell’s fingerprints all over it”.
In her second appendix (yes, she had two appendices) to her response letter, Kerswell began by writing: “The council wishes to highlight several inaccuracies.” It was downhill from there.
Put in their place: officials at MHCLG have not been impressed by Croydon’s response
“The assertion that early efforts were ‘largely reactive’ is incorrect,” Kerswell wrote to the Ministry, claiming that she has been proactive, and clearly not realising that this is no time for her to try to protect her reputation.
Kerswell’s note also sought to apportion blame elsewhere, namely with the Tory government-appointed improvement panel. “To describe the outcome of the budget process as a ‘misjudgement’ and infer it was made solely by the council is inaccurate.” Ooo-err.
Kerswell (and Perry, too, it is fair to say) really did not appreciate what was supposed to be the final report to MHCLG from the improvement panel, which has been in place in Croydon since early 2021.
Headmistress Kerswell, in her note to government last week, wrote: “Descriptions such as ‘runaway position’ and ‘outlier’ are not supported by comparative data. Croydon’s financial pressures are consistent with those of many London boroughs.
“The letter states that Croydon’s financial position has deteriorated relative to other councils. This is not supported by data when measured against core spending power.” Although Kerswell’s Croydon was the only London borough to rattle its begging bowl for £136million.
“There’s really no coming back from that,” a Katharine Street source said at the weekend.
A final decision on whether the government will send in a Commissioner or commissioners to run Croydon Council in place of Kerswell and Perry is expected to be announced within the next fortnight.
But whether Perry steps in beforehand and dismisses the council chief executive, potentially at huge cost to the borough’s residents with local elections less than a year away, remains uncertain.
“He might just wait for the inevitable and let whoever is appointed as Commissioner have that final conversation with Katherine about her failure and untenable position,” another source said.
“It would be just like Perry to duck the big decisions.
“And Croydon’s residents would probably still have to pick up the bill.”
Read more: Ministry planning one-year stay in Croydon for Commissioners
Read more: McMahon acts after serious concerns on ‘aspects of leadership’
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
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Sometimes you have to bite the bullet. Better to get rid of somebody who is the cause of the problems than continue to suffer them. Potentially costly as it is in payoff terms, that amount of money is relatively small compared to the cost of the future mess under her tenure. Perhaps another question is, do potential CEOs, good or bad, just see Croydon Council as a perpetual gravy train?
As Piss-Poor Perry is an idiot when it comes to legal action (amongst many others of his failings), having failed to claw back anything from Negreedy, he should probably not try to sack the Kerswell now (at vast expense to Croydon’s council taxpayers), but should instead wait for the Government Commissioner(s) to arrive, as they should be better able to find enough grounds for the Kerswell’s “gross misconduct” in office, and should be able to get rid of her at a far lower/zero cost to the council, who have already paid* her nearly £1m (4.5 years at £200k p.a.).
* = other reports keep saying she “earned” nearly £1m, but there is a vast difference between earning salary and just being paid it, especially in the Kerswell’s case !
Has Croydon even GOT the money to give this incompatent creature a golden handshake? God, I hope not.
Get rid of both of the fatcats literally. Outdated past there sell by dates. What have we seen in 4 years of improvement nothing. They go on social media saying we cut the grass we cleared a fly tip big deal. We want a decent town centre, pot hole filled, low crime, efficient public services not lollipop and library shut. The tories blame labour for the debt but it was them who originally run it up to 800mil labour just finished what they started hence the bankruptcy.
Certainly no love for Kerswell from the Tory councillors – they wanted her gone after election night. But isn’t this exactly what DEMOC wanted with the executive Mayor – giving Perry supreme power to hire and fire? Which….er… he hasn’t used at all. And, to quote the Mayor’s main plank of his defence against the appointment of commissioners… Kerswell will claim that ‘no one told me I was doing a bad job’. Instead of paying £6m for consultants, he could’ve ditched her for a fraction of that!
Good thing DEMOC are still around and accountable, eh?
Something needs to be done about these public sector failures. It is wrong on so many levels that they get massive payoffs for underperformance when they should be fired. She earns more than the Prime Minister and many staff earn more than their private sector counterparts along with their outdated and costly local government pensions. People in this borough who have worked all their lives have to pay more on their Council Tax to fund failures like Kerswell than they have to spend on food. Even a tribunal wouldn’t award her the kind of payoff she got after 16 months at Kent County Council. She doesn’t deserve a penny. Just bloody go.
Perry to be decisive and take a radical decision? Are you having a giraffe. All he is doing now is trying to move the rubbish he has been piling up under his own carpet and put it at the door of the incoming emergency administration and attempt to blame them for it. There seems little doubt that Commissioners will take over now with the pitiful response mustered by Kerswell Reid & Perry. Has Kerswell Reid considered that this does make her redundant. She should not be compensated above the usual level of statutory redundancy for this. If she wants one of her big pay offs then let her bear the expenses of a legal action on her own back. Lets face it the evidence of her negligence and incompetence is now apparent to all.
All’s well that ends Kerswell. Whatever the cheapest option of getting rid of Kerswell should be taken. I hope our Mayoral candidates are drawing up short lists of CEOs to headhunt because they can’t do a good job without a good CEO.
The role is redundant. Perry was elected on the back of her failure – mainly to tackle the dubious planning practices and decisions. If Commissioners take over the Council, we don’t need a CEO, two deputy CEOs and a Mayor. That many people will only cause confusion and slow things down. She can be paid her notice and statutory redundancy.
You forgot the civic mayor on your list of obsolete, useless and unnecessaries…
So before we get to the poor people who have to deliver services we will have Comissioners, a Mayor, a CEO, Deputy CEO, Executive Directors, Directors, and Heads of Service, that’s a lot of people to pay to not make any decisions
Certainly deserves to be sacked for learning nothing from efficient local authorities like Wandsworth.
And so does Perry