Croydon Council is going to pursue its former Chief Executive Jo Negrini to recover as
much money from her settlement package as possible.

The new administration has also agreed to call in the police over the council’s financial collapse referring two stand alone reports by Richard Penn and private investigators Kroll to the Met.
The Penn report laid bare the failures that left Croydon Council bankrupt – portraying a dysfunctional and bullying culture overseen by the previous Labour administration.
A shocking expose of political inadequacy at the top of the Labour administration and senior management incompetence within the council it was kept under wraps for two years.

The report which doesn’t name anyone except by their job title recommended that the council look at ways to recover some of the £437,000 pay-off to ex-chief executive Negrini.

In what is thought to be a first for local government, councillors have given their backing for legal action to recover as much of this settlement  as is legally possible.

Mayor  Jason Perry is also set to write to Michael Gove, the Secretary of State, the Committee on Standards in Public Life, the Chair of the House of Commons Select Committee on Local Government and the Chartered Institute of Public Finance and Accountancy (CIPFA), asking them to urgently review councils’ powers to hold individuals to account for catastrophic failures in governance.

A substantial period of time has elapsed since the council originally went bankrupt and many of these issues were exposed.

While the Reports in the Public Interest were passed to the police in 2021 it is only now that the committee has agreed to officially refer these corporate failings to the police.

The findings of the Kroll investigation in to possible fraud linked to Fairfield Halls and council-owned developer Brick by Brick were presented to the council’s Appointments and Disciplinary Committee committee today.
Only a third of the three hour meeting which discussed pursuing Jo Negrini over her settlement was in the public domain.
Many of the recommendations agreed were in the  Penn report which was delayed because of protracted legal issues around those who were not named but identified in the report – by title – being allowed to challenge the information detailed.

Kroll is a private firm of corporate investigators who the council paid around £300,000 to probe the huge overspend at Fairfield Halls. This was commissioned by the previous administration and Richard Penn was appointed by the Local Government Association.

The council is also referring individuals to relevant professional institutions who operate a disciplinary code in relation to their membership.

It’s unclear whether the police will be able to use these reports as part of their probe or whether they will have to start a new investigation from scratch.

Either way the case will need to be strong enough for the Crown Prosecution Service to consider charges but for instance, misfeasance in public office is extremely difficult to prove and cases involving local authorities are few and far between.

Mayor Jason Perry said after the meeting: “Like so many residents, I feel angry about what has happened to my hometown.

“I feel as strongly as they do that those responsible ought to be held to account for their part in Croydon’s downfall.

The scale and severity of Croydon’s financial collapse is unprecedented, and that is why we are recommending unprecedented steps.”

The council has issued three Section 114 Notices; it has had to make savings of £90m over the last two years and another £36m this year; it has a total of £1.6bn in toxic debt, and has had to seek permission to borrow £369m from government.

The government recently indicated its intention to intervene in the management of the council over fears that it was not providing ‘best value’ for its residents.

Mayor Perry who pushed through a 15 per cent increase in the council tax to stave off further cuts to front line services, said tonight: “It is completely unacceptable that individuals who held positions of trust should escape the consequences of their misconduct.

“Nor should they be rewarded for their failures while our residents, businesses and partners continue to pay the price.

“They must be held to account – that is why I have consistently pushed for the council to take the strongest possible action against those responsible.”

A background report provided to committee members concentrated in detail on the lack of powers available to local councils to pursue council staff and politicians.

Mayor Perry added: “I will also be making the case to government that councils must have greater powers to hold former officers and members to account for misconduct – without risking further costs to the taxpayer.”

Read here about how the demise of Croydon had no impact on the rise and rise of Jo Negrini.