Agenda item

Please note that this report will be updated following the meetings of the Scrutiny and Overview Committee and the General Purposes and Audit Committee scheduled to be held on the 1 and 3 March respectively. The report will be further updated once the Council has received a decision from the Secretary of State on its request for a capitalisation direction.

 

a)     Questions to the Leader

 

To last for a total of 15 minutes, the first three minutes available for announcements from the Leader.

 

b)     Questions to the Cabinet Members for Croydon Renewal and Resources & Financial Governance

 

To last for a total of 15 minutes, the first three minutes available for announcements from the Cabinet Members.

 

c)     Scrutiny Business Report

 

To last for a total of 10 minutes, the first two minutes available for announcements from the Chair of Scrutiny and Overview Committee.

 

d)     Council Tax Debate

 

The mover of the budget recommendations shall have 10 minutes to speak, followed by the Leader of the Opposition who shall have 10 minutes to speak. There shall then be five further Members from each group called to speak for no more than three minutes each. The debate shall conclude with a right of reply from the Leader of the Council or other Cabinet Member for not more than five minutes.

 

At the conclusion of the debate the following recommendations will be taken through a recorded vote:

 

1.3       1.99% increase for Croydon Services in 2022/23 (in line with government’s core spending power assumptions) as detailed in Section 10 of the report and Appendix 1E;

 

1.4       A 1.00% increase in 2022/23 for the Adult Social Care Precept (in line with government’s core spending power assumptions) as detailed in Section 10 of the report and Appendix 1E; and

 

1.5       To note the draft Greater London Authority precept on the Collection Fund and increase of 8.8% as set out in Appendix 1F.

 

Before discussion of the item the Mayor reminded all present that an additional recommendation had been included in this item, asking Council to note a capitalisation direction letter from the Government.

 

Questions to the Leader

 

Members were then offered the opportunity to submit questions on the Budget to the Leader.

 

Councillor Jason Perry asked if the Leader regretted agreeing to the formation of the myriad of subsidiary companies that the Council was responsible for.

 

The Leader responded that the administration had faced significant challenges over the last 16 months. For example, not having had sufficient oversight of its own companies; but that that had not deterred it from putting the Council on a much better financial footing. The Leader pointed out that the Council now had proper oversight of its interests, that the budget was projecting an in-year underspend, and that it had a record of delivering £44m of savings at the end of the financial year.

 

Councillor Perry submitted a supplementary question, asking if the administration had had sufficient oversight when it agreed to companies being formed, and of the tangled web of accounts which had left a £73m hole in its budget for the next year.

 

The Leader responded that it was not only the responsibility of the majority group at the time for making decisions on the options put to the Council, but that non-executive committees with members from all groups had contributed to these decisions being made. The Leader also pointed out that there had been a lack of professional advice around the refurbishment of Fairfield Halls when the report had been submitted to Cabinet, and that members of the Chamber had not been properly informed of all the risks at the time.

 

Councillor Nina Degrads then submitted a question to the Leader, asking how this budget provided investment in services, residents value, and priorities the most, to which the Leader replied that the management and implementation of the budget across the council had enabled the administration to protect frontline services that residents valued. The Leader mentioned that they had focussed on making savings in areas that affected residents the least, such as building use and senior staffing. The Leader went on to say that there was growth projected within the budget which could be used to support Special Education Needs, carers, and youth provision, all of which were top priorities identified by residents.

 

Councillor Lynne Hale then questioned the Leader, asking at what point she was aware that the reason Grant Thornton, the Council’s independent accounts manager, was not able to sign off the 2019-20 accounts was due to their concerns about the treatment of £114m related to Croydon Affordable Homes and Croydon Affordable Tenancies.

 

The Leader responded that these issues had featured in Scrutiny and Overview Committee meetings, General Purposes and Audit Committee meetings, and Cabinet meetings, and that bank reconciliations and Croydon Affordable Homes had been highlighted in a paper that had gone to Cabinet in December. The Leader asserted that it was not known that the risk would transform in the way that it had to date, and that the scale and detail of the issues had emerged over time.

 

Councillor Hale then asked if the Labour Group had dismissed Grant Thornton as a result, and if so, when this had been done, to which the Leader responded that it was not true.

 

Councillor Maddie Henson submitted a question asking how the Leader thought that providing support to people fleeing war in Ukraine for the safe haven of Croydon would affect the budget in future. The Leader responded that although Central Government had not fulfilled all of its promises to reimburse Local Authorities for the financial contributions they had made for refugees it had been positive that some in-year funding had been received. The Leader also assured Council that affects on the budget had been looked at in Cabinet, and that she had applied to the Bishop of Croydon for Borough of Sanctuary status.

 

Questions to Cabinet Members

 

Councillor Sean Fitzsimons stated that through work done by the cross-party Scrutiny committee some risks had been identified in the budget, and that the committee had set out some recommendations in response to those risks. They did, however, feel confident that this was a robust and sustainable budget and that the previous and incumbent S151 officers had ensured that the risks could be adequately mitigated.

 

Councillor Helen Redfern asked how and when Councillor Fitzsimons had notified the Head of Internal Audit of their concerns of suspected fraud involved in the refurbishment of Fairfield Halls, to which Councillor Fitzsimons replied that it had happened following a Council meeting. He stated that he was following guidance written in the Constitution of Croydon Council.

 

Councillor Redfern submitted a supplementary question to clarify whether it was only after the Labour Group had voted against referring the Report in the Public Interest (RIPI) findings to the police that Councillor Fitzsimons’ suspicions were raised. Councillor Fitzsimons insisted there was no evidence of fraud at that moment in time, but that once he had heard from officers he made his judgment.

 

Councillor Chris Clark asked how important cross-party involvement was to Councillor Fitzsimons in the functioning of scrutiny, to which Councillor Fitzsimons explained that Croydon had much more cross-party involvement on its Scrutiny panel than most other Local Authorities, and that he had been very proud to be part of a committee on which councillors from both sides made large contributions and helped form the recommendations. Councillor Fitzsimons took the opportunity to thank all members for their commitments to Scrutiny over the last year in holding the Council to account.

 

Councillor Clive Fraser asked if the Chair of Scrutiny and Overview Committee agreed that timely and effective responses to Members’ Enquiries was pertinent to the effective scrutiny of the budget, to which Councillor Fitzsimons agreed that Access to Information was a vital part of the role, and that he hoped going forward that there would be resources in place to better support providing that access. In response to a supplementary question on the issue, Councillor Fitzsimons admitted that he had expressed scepticism of the new system but that he looked forward to seeing what it offered.

 

The Mayor then reminded members that one of the Council’s improvement actions was to task the General Purposes and Audit Committee (GPAC) with assessing the Council’s reserves strategy before the budget was agreed. Mr Mayor then invited the Independent Chair of GPAC, Dr. Olu Olasode, to update Council on the committee’s conclusions.

 

Dr. Olasode explained that GPAC had sought assurances from officers around processes used to identify risk whilst developing the budget. This action was agreed upon after the first RIPI to ensure that all risk and liabilities had been properly considered. The committee carried out this risk assessment in March 2022 and noted that there were a number of unknown risks, which had been factored in in different wats to give sufficient buffer within the reserves proposal. The committee had explored the Council’s reserves and had found that they were adequate. It also noted that there would be a general reserves balance of around £27.5m.

 

Council then moved onto the substantive item: the Council Tax Debate.

 

Addressing Council the Leader MOVED to approve the Budget, and noted tireless efforts by officers to fix the council’s finances and put it on a surer financial footing for the future. The Leader believed that this administration had achieved better financial management, governance, transparency and trust in the Council. The Leader pointed out that the budget was projecting an underspend, which was in stark contrast to the position twelve months prior. She stated that, despite lack of support from Central Government to deliver on promises it made to provide finances for various programmes, the Budget proposed £55m of service savings. However, difficult decisions had to be taken and the only choice members could take was to increase Council Tax. It had ensured, however, that the most vulnerable were protected from paying any at all, through the Council Tax support measures put in place, and that this Budget made services more efficient and maximised protection for key services for residents. The Leader than recognised the work of Scrutiny and Overview Committee and GPAC in reviewing the Budget and thanked officers for their hard work, which demonstrated how the Council had improved its governance processes.

 

Councillor Stuart King SECONDED the motion and reserved his right to speak.

 

The Mayor then declared that the Opposition had formally submitted an amendment to the Budget and invited Councillor Cummings to speak.

 

Councillor J Cummings MOVED the amendments, and mentioned that the Labour leadership had made the lives of children, the elderly and school teachers harder by closing Purley Pool. Councillor J Cummings explained that the amendment was written in consultation with officers and included achievable timescales and allowed time for a proper procurement process to take place.

 

Councillor Jason Perry SECONDED the motion and reserved the right to speak.

 

Councillor Oliver Lewis responded that the amendment had not taken into account that Purley Pool required an entirely new development, and likened the amendment to a sticking plaster. He also stated that the amendment had not been costed correctly as it did not contain contingency in the Community infrastructure Levy (CIL) budget, which would lead to budget cuts.

 

Councillor Patsy Cummings repeated that they were looking to use CIL money to make a new pool and leisure centre as the current site was not fit for purpose, and she encouraged all members to cooperate for the good of residents.

 

Councillor Perry then described how the Labour leadership had closed the pool when it had reopened others, despite huge opposition from residents, schools and businesses, and that it was not sufficient to tell residents to use pools in neighbouring areas or areas in other parts of the borough as they should be able to use local facilities.

 

The Mayor then put the amendment to the vote.

 

RESOLVED not to amend the Budget to include Purley Pool Refurbishment and Modernisation Project.

 

Councillor Perry, as Leader of the Opposition, was awarded ten minutes to speak on the motion. Councillor Perry stated that he looked forward to the new system of governance that was voted in favour by the residents of Croydon: to an elected Mayor system, after the May 2022 Borough Council elections. He raised again that the accounts were not signed off for 2020-21 and that there was a £73m hole in the accounting. He said that the Labour administration had bankrupted the borough and bypassed procurement rules for the Fairfield Halls refurbishment, and that the result was to increase Council Tax. Councillor Perry then listed a number of public services which had suffered funding cuts due to the poor financial management of the Labour administration, including libraries, children’s services, youth services, and parks and open spaces. He also pointed out that failures to deliver opportunities for increasing revenue, such as the Westfield project, had cost the Council millions in business rates, and that the sale of assets had been worth less financially to the Council than it was worth to the community to retain those assets. He stated that Croydon needed a Conservative Mayor to secure its future.

 

Councillor Young responded that the Council had been faced with enormous challenges, despite which the administration had managed to stabilise the finances and deliver a balanced budget with a forecast of modest underspend. Councillor Young claimed that Councillor Perry did not believe that there was a real issue around fair funding, at which point Councillor Perry requested to make a Point of Personal Explanation that he had been misquoted, and that he had said that it was true that funding had been cut.

 

The Mayor then called on Councillor Kolade to speak, who stated that the circumstances under which this budget was developed reflected badly on Croydon, and that local tax was very high whilst the level of service provision was very low. He stated that cuts had been made to the services and avenues of support that affected the most vulnerable, and that the Labour administration had approved the cut to Council Tax support for 15,000 residents during a time when nursery school fees and energy bills were rising.

 

Councillor Janet Campbell talked about the focus of Adult Social Care, and that budget cuts and controlled spending had been reviewed in order to continue to provide statutory services and keep residents safe during financial challenges. Councillor Campbell spoke about the initiatives that Adult Social Care had delivered to support the borough, including the Newly Qualified Social Worker programme, and that Adult Social Care had residents’ voices as the focus of Adult Social Care. Councillor Campbell encouraged cross-party investment in mental health hubs and a care network across the borough.

 

Councillor Hoar then attributed the financial mismanagement of the Labour administration to the downfall of the borough, as they had been in power for the last twelve years, and accused the current members of passing the buck.

 

Councillor Fitzpatrick stated that the Leader had restored sound governance and set a sustainable budget and that her Cabinet had fulfilled the pledges it had made to do so. The work to put a strong financial strategy in place had been greeted by the governance inspection panel with nods of satisfaction, and that the improvements in the council were a source of hope and pride and that they were able to deliver this despite twelve years of Conservative austerity and cuts.

 

Councillor Hale accused the Labour administration of having missed opportunities and not grasping the transformation of services in Croydon. She stated that approved budgets of the past had not been delivered and that huge loans had been racked up, the debts of which were being passed on to residents.

 

Councillor King argued that despite this the Opposition failed to deliver a substantial alternative budget, and that this Budget provided support through the cost of living crisis, invested in tackling the climate emergency, invested in parks and green spaces, and Croydon’s recovery.

 

At the conclusion of the debate the Mayor took recorded votes on the three recommendations.

 

The first recorded vote was for recommendation 1.3: 1.99% increase for Croydon Services in 2022/23 (in line with government’s core spending power assumptions) as detailed in Section 10 of the report and Appendix 1E.

 

The members who voted in favour were: Councillors Kola Agboola, Hamida Ali, Leila Ben-Hassell, Sue Bennett, Mike Bonello, Alison Butler, Janet Campbell, Robert Canning, Louis Carserides, Chris Clark, Stuart Collins, Mary Croos, Patsy Cummings, Nina Degrads, Jerry Fitzpatrick, Sean Fitzsimons, Alisa Flemming, Felicity Flynn, Clive Fraser, Patricia Hay-Justice, Maddie Henson, Karen Jewitt, Humayun Kabir, Bernadette Khan, Stuart King, Toni Letts, Oliver Lewis, Stephen Mann, Joy Prince, Pat Ryan, Paul Scott, Manju Shahul-Hameed, Caragh Skipper, David Wood, Louise Woodley, Callton Young, Sherwan Chowdhury.

 

The members who voted against were: Councillors Jade Appleton, Jeet Bains, Margaret Bird, Simon Brew, Richard Chatterjee, Mario Creatura, Jason Cummings, Maria Gatland, Lynne Hale, Simon Hoar, Yvette Hopley, Ola Kolade, Stuart Millson, Michael Neal, Ian Parker, Andrew Pelling, Jason Perry, Helen Pollard, Tim Pollard, Badsha Quadir, Helen Redfern, Scott Roche, Andy Stranack.

 

The recommendation was carried; 37 votes in favour and 23 against.

 

The second recorded vote was for recommendation 1.4: a 1.00% increase in 2022/23 for the Adult Social Care precept (in line with government’s core spending power assumptions) as detailed in Section 10 of the report and Appendix 1E.

 

Council voted UNANIMOUSLY in favour of the recommendation.

 

The third recorded vote was for recommendation 1.5: To note the draft Greater London Authority precent on the Collection Fund and increase of 8.8% as set out in Appendix 1F.

 

The members who voted in favour were: Councillors Kola Agboola, Hamida Ali, Leila Ben-Hassell, Sue Bennett, Mike Bonello, Alison Butler, Janet Campbell, Robert Canning, Louis Carserides, Chris Clark, Stuart Collins, Mary Croos, Patsy Cummings, Nina Degrads, Jerry Fitzpatrick, Sean Fitzsimons, Alisa Flemming, Felicity Flynn, Clive Fraser, Patricia Hay-Justice, Maddie Henson, Karen Jewitt, Humayun Kabir, Bernadette Khan, Stuart King, Toni Letts, Oliver Lewis, Stephen Mann, Joy Prince, Pat Ryan, Paul Scott, Manju Shahul-Hameed, Caragh Skipper, David Wood, Louise Woodley, Callton Young, Sherwan Chowdhury.

 

The members who voted against were: Councillors Jade Appleton, Jeet Bains, Margaret Bird, Simon Brew, Richard Chatterjee, Mario Creatura, Jason Cummings, Maria Gatland, Lynne Hale, Simon Hoar, Yvette Hopley, Ola Kolade, Stuart Millson, Michael Neal, Ian Parker, Jason Perry, Helen Pollard, Tim Pollard, Badsha Quadir, Helen Redfern, Scott Roche, Andy Stranack.

 

Councillor Andrew Pelling abstained.

 

The recommendation was carried; 37 votes in favour, 22 against and one to abstain.