Croydon Council has made a cross-party agreement to lobby the new government on the legal framework concerning misconduct in public office.

The council’s Appointments and Disciplinary Committee maintain that the current powers to prosecute individuals in public office for serious failures and breaches of statutory duty is inadequate. They are calling for a change in the law so that individuals can be held accountable for failings.

The committee referred a suite of reports, including the independent Penn and Kroll reports, to the Metropolitan Police for them to consider after the reviews found serious financial mismanagement and governance failures, which led to the council’s financial collapse in 2020.

While the police agreed that there had been ‘potential wrongdoing, breaches of statutory duty and incompetence’, they concluded that was not enough for them to take any further action. This is owing to the current law, in which misconduct in public office is a common law offence, is very narrowly defined, which means it is only applied in very limited circumstances.

Committee members, who met on Monday (9 December), were deeply disappointed with the outcome. They have committed to lobby the government on this issue on behalf of Croydon’s residents, who continue to suffer the consequences of the financial mismanagement and governance failures of the past.

The council will also resume its work on making referrals to professional bodies, which were paused pending the outcome of the police review.

The committee agreed that the Kroll report should be published – in the same way that all previous reports have been – so that Croydon residents can fully understand the background to the council’s financial collapse in 2020. The Kroll report was an independent review into the refurbishment of Fairfield Halls. It was commissioned by the council to investigate the decision making and governance that led to the project running over schedule and budget. The Kroll report has been published in full on the council’s website.

Following a thorough review of the issues, the committee also agreed that the council should not take any further action to seek to recover the settlement payment made to the former Chief Executive. The committee agreed that it was not cost effective to continue to seek recovery of as much of the settlement payment as was legally possible because embarking on expensive, difficult litigation, even on an important point of principle, was not ultimately in the best interests of Croydon residents. The committee was unanimous that the real frustration was with the majority of members on the council’s former Appointments Committee who should never have agreed to the settlement payment in the first place.

Since 2020, Croydon has made changes to ensure that the mistakes that led to Croydon’s financial challenges are not repeated. The council has introduced new internal controls and more rigorous governance, such as the independent chair of the Audit Committee, amongst other initiatives. Croydon’s government-appointed improvement and assurance panel (IAP) and the Ministry of Housing Communities and Local Government have both recognised the continuous improvement the council is making.

“I’m pleased that we continue to have a cross-party agreement to lobby the government on this issue. We are hugely disappointed that we can no longer take further action within the existing laws, for holding those people who damaged Croydon so badly to account. I was one of two members of the former Appointments Committee who did not agree to the former chief executive’s settlement agreement and I stand by that decision.

“Residents have, quite rightly, been very angry over this. I share that anger. This highlights a serious gap in the law, and we are calling for change so it cannot happen to other local authorities.

“It is right that we publish the Kroll report, as we want to be open about what happened and why. We hope that this continued commitment to transparency over what happened in the past helps as part of the process of rebuilding trust and confidence with Croydon’s residents. Now is the time to look forward and focus on the future of Croydon and restoring pride in our borough.”

Jason Perry, Executive Mayor of Croydon