Croydon bankruptcy: ‘Significant failings in leadership’

Pic: Croydon Council

Croydon Council’s financial collapse happened because of “significant failings in leadership and management”, an independent rapid review has found.

According to the review, which was released in early February, the council failed in identifying, escalating and addressing financial risk and their poor leadership and poor management lasted many years.

“The rapid review into Croydon Council found serious failings in governance, financial strategy and commercial investments which have led to taxpayers and residents being severely let down over a number of years,” said Robert Jenrick, the Local Government Secretary.

Following the findings of the report, Jenrick has submitted an improvement plan with the appointment of a specialist panel to address the council’s failures. 

The panel will independently review Croydon Council’s request for exceptional financial support and the council’s revised improvement plan.

The expert panel will also monitor the council’s progress and examine the overall governance, culture and risk management. They will report back to the Ministry of Housing, Communities and Local Government quarterly.

Council leaders ‘fully accept findings’  

During the review period, the team led by Chris Wood, an expert in leadership, growth and change guidance, held over 60 meetings with key officers and elected members of the council.  

Council members have recognised the significant failings and are committed to resolving the issues.

In her response to the report, council leader, Hamida Ali said:  

We fully accept the findings of the rapid review and the serious concerns around the council’s financial position and past governance… I have been clear that my absolute priority is to get Croydon’s finances back on track and strengthen our governance.” 

Poor management at Croydon council is said to include a positive tone surrounding their financial reports which did not “accurately reflect the seriousness of the Council’s financial position”. 

The government announced that they will intervene further and install a commissioner team to take over decision making in key areas if the set milestones for an effective recovery aren’t met. One of these key areas is staying within the council’s budget. 

Robert Jenrick assured: “I will be monitoring progress closely and will not hesitate to take further action if necessary.” 

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