In the wake of the resignation of Croydon Council’s CEO and now its leader Tony Newman, Croydon Council’s auditors, Grant Thornton, have issued a report about Croydon’s weak ‘financial resilience’. You can read the full report by following the link here.
The Council set its 2021/21 budget prior to the Covid-19 pandemic being declared. The auditors complain that there was insufficient challenge from councillors on the financial risks of the budget for 2020-21. From their lofty position and advantage of hindsight, they chide the council that budget setting and monitoring was simply “not good enough”. The pressure points, aside from lacking a crystal ball over Covid-19, arose in their view from over-spending on children and adult social care and the failure to deliver “real savings” in this area. The auditors were miffed that their warnings in the two preceding years were ignored. It is the nature of the auditing profession, however, to seek to cover themselves by issuing such warnings while continuing to collect their not unsubstantial fees. As a profession their ability to predict real financial collapses is practically non-existent and for which the collapse of Carillion in 2018 is merely the latest example.
The real problem with local government, including that in Croydon, is not over-spending on social services, it is the absence of tax raising powers and democratic control. As Peter Latham described so vividly in Who Stole the Town Hall, (Policy Press 2017), local government has been reduced to being a mere supplier of subcontracted services under control of a central government intent on lining the pockets of big business who, in return, finance their political party.
Earlier this year we mourned the death of Ted Knight. Ted was Leader of Lambeth Council when Thatcher imposed a cap on the local rate that councils could levy. Ted led a national campaign against the policy and in 1985 refused to set a capped rate because it would have resulted in large-scale cuts. As a result councillors were personally surcharged £125,000, removed from office and banned from standing again. Ted would have been bankrupted had not the surcharge been paid off by the local labour movement. Ted remained politically active for the next 35 years and ended his life as a leading light on Croydon TUC where I was privileged to work with him.
If we are to attain the kind of democratic local government that Peter Latham had in mind, we need more councillors and council leaders of Ted Knight’s calibre – ones who are prepared to face down the government and set the budgets they know, as our democratically elected representatives, are needed