Using directions under section 15(5) of the Local Government Act 1999 the Government has decided to increase control over Croydon Council through increased powers to the Improvement and Assurance Panel for two years. The announcement was made in the House of Commons and followed up with a letter from the Secretary of State.
The Council has the legal right to make representations before the Government finalises the proposed intervention package.
Commenting on the Historic Croydon Facebook Andrew Kennedy writes
‘Our Mayor is no longer in charge and will not be for at least the next two years. What he says he would like to happen is not necessarily what will happen. The Improvement Panel can issue contrary directives. ….So look out people, communities and organisations, assets may be seized and sold at any moment. Taxes raised and services curtailed.’
Government Conclusions
The Government has concluded:
- that the Council is failing to comply with its Best Value Duty;
- that given the scale of the challenges ‘further serious issues may be uncovered which could have a severe impact on the Authority’s ability to maintain and increase the momentum of the required improvements that they have started to make’;
- that ‘there has been a delay in the Authority taking an effective grip of the key issues it has faced since 2020’;
- that there ‘is evidence that whilst the Council is now starting to increase the pace, the Authority has not made progress at the pace of change expected since the commencement of the intervention and appointment of the Improvement and Assurance Panel in February 2021, particularly in relation to the transformation of its housing service’;
- that on ‘financial governance, there is evidence of poor record keeping and budget management, alongside an overall lack of strong grip on financial management;’
- that ‘(H)istoric legacy issues continue to be discovered, with current financial pressures made up of £161.6m of errors in historic accounts that require correction;’
- that the accounts for the three years 2019 to 2022 ‘remain open and there is a risk that further pressures may crystallise following the findings of the Mayor’s Opening the Books exercise’;
- that on ‘culture and leadership, a culture whereby difficult financial decisions were not taken and implemented has been allowed to embed within the Authority over several years’;
- that on ‘services, the Authority does not currently have the capacity to resolve at pace the magnitude of the financial issues it faces, and there is a risk this will significantly impact on service delivery’;
- that on ‘capacity constraints ….. particularly with regards to the ….. finance and housing functions.
- that the housing service ‘requires a credible and properly defined improvement programme, alongside substantial corporate support for the new Housing Director’.
The Proposed Intervention Package
The Government explains that the intervention package will need:
- ‘To ensure that the strategic and systematic approach to risk management, with appropriate scrutiny and governance of the decision-making processes and procedures, continues and becomes embedded across the Authority.
- To continue to address the culture of poor financial management of the Authority.
- To continue to develop the governance capacity of the Authority in respect of its commercial portfolio.
- To restore public trust and confidence in the Authority by ensuring that the Authority’s activities, practices, and omissions are compatible with the Best Value Duty.
- To secure as soon as practicable that all the Authority’s functions are exercised in conformity with the Best Value Duty thereby delivering improvements in services and outcomes for the people of Croydon.’
Supporting The Improvement and Assurance Panel
The Council will be required:
- to follow the instructions of the Panel;
- to allow the access to premises, documents and employees and Councillors;
- to provide the Panel with ‘reasonable amenities and services and administrative support;
- to pay the Panel ‘reasonable expenses, and such fees as the Secretary of State determines are to be paid to them;
- to provide the Panel ‘with such assistance and information, including any views of the Authority on any matter’, as Panel ‘may reasonably request;
- to ‘co-operate with the Secretary of State for Levelling Up, Housing and Communities in relation to implementing the terms of any directions’.
The full text of the Government letter can be read at:
https://www.gov.uk/government/publications/london-borough-of-croydon-letter-to-the-chief-executive
Labour Hypocrisy
The Labour Councillors, several of whom were responsible for the financial crisis, have hypocritically made the following statement:
‘In a damning judgement the Conservative government has declared Conservative Croydon a failing council that is not meeting its Best Value Duty to residents.
Giving new powers of direction to government officials is a clear sign that the government is losing confidence in the leadership of the council. Residents have already lost confidence in the council after Croydon’s Conservative mayor and councillors imposed a staggering 15pc increase in council tax on residents in the middle of a cost of living crisis created by their own government’s mismanagement of the economy.’
Inside Croydon’s discussion on the situation can be read at:
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