Review into finances of Croydon council as Local Government Secretary Robert Jenrick says authority has been “entirely irresponsible with spending”

By Tara O’Connor, Local Democracy Reporter

The Government will review the “completely unacceptable” financial state of Croydon council.

The announcement was made by the Local Government Secretary Robert Jenrick on Thursday.

It will look into the council’s overall governance, culture and risk management following the authority’s announcement that it would seek exceptional financial support from the Government.

The council is on the brink of bankruptcy and in the process of asking the Government for a bailout of more than £20 million.

On Friday the extent of the issues at the council were laid bare in a damning report by external auditors Grant Thornton, which highlights years of mismanagement and ‘collective corporate blindness’.

The report shows that the council was in financial trouble long before the current coronavirus pandemic, with auditors raising concerns about the council’s financial stability back in 2017/18.

Croydon council has now agreed to the government’s ‘informal review’ to identify issues and make recommendations.

There could well be a more formal statutory intervention from the Government, a decision on this will be made after this.

Mr Jenrick said: “The situation at the London Borough of Croydon is deeply concerning and completely unacceptable – local people rightly deserve and expect better than this from their local council leaders.

“The Public Interest Report is damming about the dysfunctional governance within Croydon council, who have been entirely irresponsible with their spending and investments.

“There are serious questions that local leaders need to answer, and we are stepping in to get the situation under control.

“Croydon council has been allocated over £23.5 million in un-ring-fenced funding since the start of the pandemic. In addition, the council’s core spending power saw an increase of nearly £20.8 million this financial year even before additional emergency funding was announced.

“Three independent reviewers have been appointed to carry out the review. Chris Wood will lead the review and will be supported by financial reviewer, Alan Gay, as well as a commercial reviewer, Boris Adlam.”

Pictured top: Croydon Town Hall