The government has demonstrated its confidence in Croydon Council’s ability to continue to lead its own financial recovery, with confirmation of its strengthened support arrangements for the next two years.
Directions published today (20 July) have confirmed that the Department for Levelling up, Housing and Communities (DLUHC) has elected not to introduce commissioners for Croydon, nor to remove any decision-making powers from the council.
Instead Croydon will continue to work closely with its government-appointed improvement and assurance panel, who have provided external advice, challenge and expertise to the council since 2020.
Today’s Directions have formalised the arrangement with the panel who are in place to make sure the council continues to improve at the pace that’s needed – and, as a last resort, have the power to direct Croydon to make decisions if they feel the council is falling behind or not delivering on its Best Value Duty.
The decision follows a letter from DLUHC to Croydon’s Chief Executive Katherine Kerswell on 16 March 2023, which welcomed the good progress the council has made. DLUHC also noted that while Croydon can and should continue to lead its own recovery, the scale of its historic problems and the extent of improvement necessary means the council is not meeting its Best Value Duty.
The Opening the Books review undertaken last year uncovered further historic financial issues requiring £224m in additional capitalisation. The scale of historic issues led DLUHC to be ‘minded to’ move the improvement and assurance panel arrangements to a statutory footing.
The panel has previously had the ability to issue advice notes where they are concerned about council decisions. Six have been issued, however they have not chosen to issue any since Croydon’s Executive Mayor Jason Perry was elected in May 2022.
In the Directions, Government recognised the improvements the council has made in its approach to risk management, and governance of its commercial portfolio. As a result of this progress, both of these have now been removed from the list of priority areas for panel intervention, which has reduced from five to three.
This was confirmed in today’s Written Ministerial Statement (WMS) which said that: ‘the Council under the leadership of Mayor Perry has made good progress in laying the foundations for its recovery’ however ‘historic issues continue to be unearthed at Croydon and their potential impact on the Council and the progress made to date cannot be underestimated’.
The WMS also stated: ‘I want to be clear that the Council will continue to lead its own recovery’ and ‘decisions will continue to be made by the Council; the intention being that the Panel will only use their powers of instruction as a last resort if they are dissatisfied with the Council’s improvement processes.’
The council has welcomed the continuation of the current arrangements but warned that the scale of serious historic financial mismanagement and the £1.6bn toxic debt burden the council carries, could not be resolved without financial support.
Croydon has put forward a range of bespoke options for government support, including a reduction in debt interest rates or writing off a portion of the council’s debt – something that has not been granted to another authority.
There have been some changes to the membership of Croydon’s panel. Tony McArdle OBE will continue to chair the panel, and Jon Wilson and Phil Brookes will continue in their respective roles as lead for adult social care and commercial and asset disposal. They will be joined by Brian Roberts OBE replacing Margaret Lee on finance and Pamela Leonce as the lead for housing.
Their experience and expertise reflect the priority areas for improvement which include fixing the council’s finances, improving housing services and rebuilding resident trust.
“When I was elected in May 2022, I pledged that I would do what it takes to tackle the financial mess I inherited and rebuild our council so that we are offering residents good services and value for money.
“Today’s decision is a welcome indication that the government continues to have confidence in our local leadership and our ability to continue to make strong progress. Putting Croydon back on the right path has meant making some really difficult decisions, but I will not shy away from those if it means protecting essential services for the people of Croydon.
“I want to thank Margaret Lee for her support and contributions as the panel’s finance lead, and welcome the new members. I look forward to continuing to work with them and with the government to develop a long-term solution for Croydon, so that we can rebuild our council and put our borough back on the map for the right reasons.”
Jason Perry, Executive Mayor of Croydon
