Croydon council prepares legal action against ex CEO over £430k payout

Owl can always dream!

(Councillors also agreed that evidence of alleged “misconduct, wrongdoing and failures” by previous senior leaders that led to its £1.6bn of “toxic” debt would be handed to the Met Police for investigation.)

A crisis-hit London town hall is preparing to take “unprecedented” legal action in a bid to claw back some of the £437k payoff its former chief executive received before the council was forced to declare bankruptcy.

Rachael Burford

Jo Negrini got the substantial payout when she was laid off as chief executive of Croydon Council in August 2020, just months before the local authority admitted it could not set a balanced budget and would need a Government bailout.

Since then it has issued three bankruptcy notices. Earlier this month the council signed-off a record 15 per cent council tax rise.

During a meeting on Thursday night–in what is thought to be a first for a British council–members backed instructing lawyers to recover as much of Ms Negrini’s payout “as is legally possible”.

Councillors also agreed that evidence of alleged “misconduct, wrongdoing and failures” by previous senior leaders that led to its £1.6bn of “toxic” debt would be handed to the Met Police for investigation.

This includes details of former cabinet members and their involvement in a botched refurbishment of Fairfield Halls, which was delayed and £37.5 million over budget.

Croydon’s Conservative Executive Mayor Jason Perry said he will write to Levelling Up Secretary Michael Gove asking him to “urgently review councils’ powers to hold individuals to account for catastrophic failures in governance”.

The Committee on Standards in Public Life, the House of Commons Select Committee on Local Government and the Chartered Institute of Public Finance and Accountancy (CIPFA) are also being asked to scrutinse the proposals.

Mr Perry, who became leader of the council last May, said: “Like so many residents I feel angry about what has happened to my hometown.

“The scale and severity of the financial collapse is unprecedented and that is why we are recommending unprecedented steps.

“The council has £1.6bn toxic debt in total and has had to seek permission to borrow £369m from government.

“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.

“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.

“This is something that I will be asking government to look at as a matter of urgency.”

During the meeting, current chief executive Katherine Kerswell added: “What has occurred at Croydon has clearly been very damaging to our finances and ability to perform our key public service functions and most importantly undermined public trust in this council.

“As such, the council’s current leadership are duty bound to ensure that those responsible for the situation are fairly and properly held to account.”

The Conservative’s won control of the council from Labour last year.

Several internal investigations have been published into its financial collapse since then.

The Penn report, published last month, found that the council was a “highly dysfunctional organisation” under the previous Labour administration with a small number of cabinet members making decisions without appropriate scrutiny.

Workers interviewed for the probe described Ms Negrini as having a “bullying style”, the report said.

“The decision to take this unprecedented action was fully supported by Croydon’s Labour councillors. We understand entirely the public’s desire to see former senior leaders at the council properly held to account,”  Croydon Labour Group said in a statement.

A source from the previous administration told the Standard that Ms Negrini had always appeared to be “engaged” in council business and “competent” .