Agenda item

The Scrutiny & Overview Committee is presented with the Exit Strategy of the Improvement & Assurance Panel, as considered by the Mayor in Cabinet on 25 October 2023. The Committee is asked to: -

1.            Review the information provided in the Cabinet report on the Improvement & Assurance Panel’s Exit Strategy, and

2.            Decide whether there are any comments or recommendations it wishes to make on the Exit Strategy.

The Committee considered a report on pages 19 to 48 of the agenda that provided a copy of the Exit Strategy prepared by the Government appointed Improvement and Assurance Panel. This report was included on the agenda to provide the Committee the opportunity to question the Panel on the report and consider whether any changes were needed in the scrutiny work programme to take account of the strategy.

The following people were in attendance at the meeting during the discussion of this item: -

·       Tony McArdle - Chair of the Improvement & Assurance Panel

·       Brian Roberts – Improvement & Assurance Panel Member

·       Jason Perry - Executive Mayor of Croydon

·       Councillor Jason Cummings – Cabinet Member for Finance

·       Katherine Kerswell – Chief Executive

·       Debbie Jones – Corporate Director for Children, Young People & Education

·       Annette McPartland – Corporate Director for Adult Social Care & Health

·       Jane West - Corporate Director for Resources & Section 151 Officer,

·       Elaine Jackson - Assistant Chief Executive

·       Allister Bannin - Director of Finance

·       Huw Rhys Lewis – Interim Director for Commercial Investment & Capital

The Chair of the Improvement & Assurance Panel, Tony McArdle introduced the Exit Strategy, during which the following points were noted: -

• It was within the remit of the Secretary of State for Levelling Up, Housing and Communities to determine how long the Improvement & Assurance Panel would remain at the Council, with the end date currently set for July 2025.
• Guidance had been published earlier in the year, setting out best practice for government intervention. This introduced a requirement to produce an exit strategy to specify what should be the realisable ambitions of the Council by the time the Panel was due to leave in July 2025.
• There was a thread running through the Exit Strategy with its starting point being what went wrong at the Council through to where it should be by July 2025. There were three specific areas of activity identified in the Exit Strategy, which the Council should be achieving by July 2025, these were: -

1.   The Council ceased to behave in the way it did prior to 2020 by using an evidence based approach to decision making that was subject to proper scrutiny.

2.   By July 2025, the Council should be able to demonstrate that it was set on a path of continual improvement, which it would not slip back from once the Panel left Croydon.

3.   By July 2025 the Council should be recognisable against other local authorities. This did not mean being the best local authority, but roughly equivalent to others.

• The Panel recognised that the Council had made progress since 2020, but at the same time there was still steps to taken to reach the expected level of improvement, which was reflected in the actions set out in the report.
• It was highlighted that although it was the Panel’s report, it had been produced in cooperation with Members and officers of the Council, which was welcomed.
• It was advised that the Exit Strategy did not address the Council’s debt burden. The Council had made a request to the Government to write off £540m of its debt, to enable it to become more sustainable in the long term. There was no guarantee that the Council’s request would be granted and at the present time would need to live with the current level of debt on its books.
• The Council had recognised that there was an annual debt shortfall of £38m in its budget and the Panel had agreed that capitalisation would be required next year to meet this shortfall. Consideration would be given to any further capitalisation requests as and when required.
• It was hoped that providing the actions set out in the Exit Strategy had been completed by July 2025, the Panel would be able to assure the Secretary of State that the Council had done everything within its power to address its historic issues.

Following the introduction provided by the Chair of the Panel, the Committee was provided with the opportunity to ask questions about the Exit Strategy. The first question asked why the report was divided into five key areas, when three specific areas of concern, namely finance, transformation and housing had been identified earlier in the year. It was advised that governance and leadership had also been included as the Panel had based the strategy on the issues originally identified in 2020. However, it was recognised that progress had been made in those areas.

It was noted that finance was the key issue for the Council if it was to achieve ongoing sustainability. The Council had made a request to the Government to write off part of its debt to enable it to achieve sustainability, but if this was not resolved then the Council would need to manage this situation as well as it could.

As a follow up, it was questioned whether the Panel would be able to leave Croydon without the long term debt burden being resolved. It was advised that this would be possible providing there was evidence the Council had addressed the causes of its failure and could provide reassurance to the Secretary of State that these failures would not reappear. It was highlighted that the Council’s debt was a result of the failure, rather than the cause.

The next question asked whether the Exit Strategy had sufficient metrics included within it to be able to demonstrate the progress the Council had made. It was advised that the Panel wanted to produce a document that was intelligent in the way it was interpreted in 2025. The strategy could have included specific metrics or vague targets, but the aim had been to find a balance between the two, with timescales and targets included where possible.

It was questioned how the Panel and the Secretary of State reassured themselves on the amount of capitalisation requested by the Council. In response, it was explained that there was an ongoing dialogue with the Council about its finances and the figures agreed had been based on these discussions and the Council’s own financial analysis. As such the Panel was reassured that £38m was required in 2024-25 for the Council to deliver its services and meet its commitments.

In response to a question about the role of Scrutiny, it was advised that the Panel did not want to duplicate the role of Scrutiny and as part of its role, also had to ensure that Scrutiny was functioning well. The Panel expected to see Scrutiny continuing to do what it was already doing in holding the Mayor to account, asking questions on performance and delivery, challenging and probing if the Council was going far enough. It was important for Scrutiny to remain focused on the priorities of the Council.

It was questioned how the Panel managed to navigate the tensions between the priorities of the Exit Strategy and the priorities set out in the Mayor’s Business Plan. It was highlighted that the Panel had the power to direct the Council if needed but hoped it would not need to be used. Instead, it was important to retain an open and ongoing dialogue. For example, it was not for the Panel to say whether the Council had the right number of libraries, but it was important to have reassurance that the Council was making the right decision for Croydon based on evidence and need,  using the proper decision making processes. It was confirmed that should the Panel need to issue a direction to the Council, then it would be transparent about doing so.

There was concern raise about who would be held accountable if the Panel gave advice to the Mayor on an area such as reducing the budget for Childrens services and something went wrong. It was confirmed that the Panel would be happy to be recorded as giving advice, as transparency was important. However, there was no set procedure and the process would need to be worked out as it arose.

It was asked whether more could be done to inform residents about the value the Panel was providing to the Council. It was explained that the Panel did try to manage its cost to the Council by seeking to only meet once a month together, although there were other days when individual panel members were in Croydon. It was acknowledged that it was difficult to explain to the public why another level of advice and support was needed. It was the intention of the Panel to be in Croydon for the shortest time possible and that by the time it left, the Council would be in a recognisably better position.

As a follow-up, it was questioned whether it would be appropriate for the public to approach the Panel directly. It was advised that it was not for the Panel to make decisions, so there was no need to go to the public unless there was a need for intervention. At which point there would be a need for transparency and to answer questions on accountability. The Panel have occasionally received contact from the public, which it reasonably investigated and provided a response.

The final question on this item asked whether through the Exit Strategy thought should be given to the organisational model. It was advised that it should, but as long as it was meeting best value, it was for the Council to decide its model.

At the conclusion of the item, the Chair thanked Mr McArdle for his attendance at the meeting and his engagement with the questions of the Committee.

Conclusions

Following its discussion of the Improvement & Assurance Panel’s Exit Strategy, the Committee reached the following conclusions:-

1. The Committee thanked the Improvement & Assurance Panel for its work in supporting the recovery of the Council and gave its endorsement to the Exit Strategy.
2. The Committee noted its appreciation for the candour of Chair of the Improvement & Assurance Panel in the responses given to their questions.
3. The Committee welcomed confirmation from the Panel Chair that the priorities in its work programme had the right areas of focus and that Scrutiny was performing effectively in holding decision makers to account on the recovery of the Council.
4. The Committee agreed that it was not solely the responsibility of council officers to deliver the Exit Strategy, and it was essential that all Members understood their own responsibilities, particularly in regard of governance improvements.