London Borough of Croydon

Croydon Council's external auditors have published on 23 October a Report in the Public Interest. The report sets out serious concerns about the council's financial situation, its financial decision-making and governance and makes 20 recommendations.

Download and read the report in full.

The council fully accepts the findings of the report and is preparing a comprehensive action plan to address all the recommendations.

An extraordinary council meeting will be held on 19 November to discuss the report and action plan.

Public notice from 11 November

Notice of Meeting to consider Public Interest Report Local Audit and Accountability Act 2014

Notice is hereby given that pursuant to Section 24 and Schedule 7 of the Local Audit and Accountability Act 2014 a meeting of the Council will be held on Thursday 19 November 2020 commencing at 6.30pm in order to consider the report in the public interest submitted by Sarah Ironmonger of Grant Thornton UK LLP, the local auditor of the accounts for the London Borough of Croydon, relating to the Council’s financial position and related governance arrangements. The report makes 20 recommendations in this regard, 8 of which are high priority, which the Council will consider at the upcoming meeting.

The full report is available online at www.croydon.gov.uk/publicinterest.

Due to the Coronavirus pandemic, the meeting will be held virtually and will be live streamed at https://webcasting.croydon.gov.uk   

Dated this 11th day of November 2020.

Katherine Kerswell
Interim Chief Executive Officer

Public notice from 23 October

Notice of Public Interest Report Local Audit and Accountability Act 2014

Notice is hereby given that pursuant to Section 24 and Schedule 7 of the Local Audit and Accountability Act 2014 (“the Act”), Sarah Ironmonger of Grant Thornton UK LLP, the local auditor of the accounts for the London Borough of Croydon, has issued a report in the public interest relating to the Council’s financial position and related governance arrangements.

The full report is available to download and read in full.

Should you not be able to go online to view the report and in accordance with the requirements of the Act, commencing from Monday 26th of October 2020 between 10am and 5pm on weekdays any person may, on prior appointment, inspect the report and make a copy of it, or any part of it, at the Council’s offices at The Town Hall, Katharine Street, Croydon, CR9 1DE. Due to the Coronavirus pandemic individual full copies of the report will also be made available for collection from the above address or sent out by post on request by telephoning 0208 8604 7469 or by emailing seth.alker@croydon.gov.uk

Dated 23 October 2020

Katherine Kerswell, interim Chief Executive Officer, London Borough of Croydon

Further information

Who are the council’s auditors and what is their role? 

All local authorities are required by law to have an External Auditor who operates under powers derived from the Local Audit and Accountability Act 2014.  

The general duties of an external auditor under the Act are to ensure that the council’s accounts comply with the laws that apply to them including:  

  • that proper practices have been observed in the preparation of the statement of accounts, and that the statement presents a true and fair view 
  • that the authority has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources.  

In addition to these general duties, auditors have specific statutory powers and duties, including:  

  • the power to issue an Advisory Notice if a council is doing something unlawful 
  • to apply to the High Court for a declaration that there is unlawful income or expenditure in the accounts 
  • to issue a Report in the Public Interest if there are significant issues related to the general duties which need bringing to the attention of the public. 

Grant Thornton has been Croydon Council’s External Auditor since 2012/13.  

What is a Report in the Public Interest? 

Under the Local Audit and Accountability Act 2014, it is a statutory requirement of the External Auditor to issue a Report in the Public Interest when ‘a significant matter comes to their notice and to bring it to the attention of the audited body and the public.’ These reports are rare and very serious.  

The 2014 Act sets out specific actions which have to be taken when a council receives a Report in the Public Interest.  

Why are Croydon’s auditors issuing a Report in the Public Interest?

Croydon’s external auditors are of the opinion that the council:

  • has experienced deteriorating financial resilience for a number of years
  • has significant issues relating to its financial sustainability
  • has not responded promptly to previous audit recommendations and concerns.

The auditors are now of the opinion that this needs to be brought to the council’s attention. 

What does the report say?

The report outlines serious concerns about the council’s financial situation and its financial decision-making and governance across a wide range of service areas, over a number of years. It makes 20 recommendations of which 8 are high priority.

We have published the report online to download and read in full

What is the council’s response to the report?

We fully accept all the findings and the recommendations of the report, and deeply regret the serious failings it has highlighted. 

The newly-appointed leader of the council, Councillor Hamida Ali, has apologised to residents, staff and partners and said that her first priority as leader is to put things right.  

What is the council doing about it?

In response to the auditor’s report and recommendations, we are developing a comprehensive action plan which will be discussed at a dedicated full council meeting. This meeting will be held in public and webcast. 

This will set out how the council will significantly strengthen its financial resilience, decision-making and governance and fully address the findings of the report

Why is the council in this position?

We fully accept the auditor’s view that as an organisation we should have understood the seriousness of the financial situation and acted sooner. 

We are already taking urgent action to tackle our financial challenges, including: 

  • Delivering a £42m package of savings in this financial year 
  • Developing the Croydon Renewal Plan, which includes
    • formally seeking a loan (capitalisation direction) from the Government in order to balance this year’s budget and enable the council’s transition to a sustainable budget over the next three years
    • a review of the capital programme
    • an independent review of the council’s group of companies and entities.

Find out more about The Croydon Renewal Plan.

What does this mean for local residents and council services?

We are determined that our improvement journey will result in better decision-making, more transparency and openness and better value for money for our residents. 

The scale of our financial challenges means that there will be some difficult decisions ahead but we are committed to transforming the way we work to ensure that we deliver local services in a way that is financially sustainable.