Don’t shoot me, I’m only the Monitoring Officer - Croydon and the Penn Report

Dr Paul Feild considers the governance implications of the delay in publishing documents where third parties have examined the finances and governance of local authorities.

This article will argue these delays are very damaging and frustrate the sound governance. It also notes an emerging tendency to blame the Monitoring Officer even when there is no legal shortcoming or non-compliance of a matter within their section 5/5A Local Government and Housing Act 1989 duty.

Delay in publishing reports about governance

Last year after the local elections I did a piece for Local Government Lawyer and highlighted the elected Mayoralty London Boroughs of Croydon and Tower Hamlets and their out of trend results.

Since then, Croydon Council has suffered the ignominy of asking the Secretary of State to agree to putting up council tax beyond the prescribed excessive figure without holding a ballot. It will go up by a staggering 15%. Tower Hamlets had better fortune in opening their new town hall the old London Hospital with the Elizabeth line just across the road and very good it is too^[i]!

Since that time, Croydon has published Richard Penn’s Report entitled ‘Corporate Collective Blindness’. The report is dated March 2021.

The reason for the delay is apparently due to legal views being required. This is a disturbing development. If a report on governance is commissioned and it finds that there are shortfallings, it really ought to be published before the 2022 local elections rather than 10 months later.

There are fears that Best Value Inspection reports will suffer a similar fate where they get caught in objections and subject to redactions. Indeed, the current draft Best Value report into a South Essex borough may well be caught within the event horizon of the legal black hole.

Now we all know just because a report is not formally published does not mean it has not been circulated albeit on a ‘need to know basis’, but until it is, it can be a contested document.

If reports are not being published or delayed then people are becoming dependent on the press and particularly the local news reporters to find out what is going on. Ok if there is a local newspaper or news web site. But it is not easy for them to penetrate how decision making is done, is it by a Mayor or by an Executive or has it been delegated to an officer? Certainly, I would highlight the work done by two journalists Gareth Davies^[ii] and Neil Speight^[iii] in relation to the aforementioned South Essex Borough in trying to get the facts regarding the council’s indebtedness.

That council refused for several years to make disclosure regarding their investment activities. For a long while this may have helped fended off statutory intervention. Davies was interested to find out more about the debt, but found his requests were refused. The council’s view was supported by the Information Commissioner. So he appealed to the First-tier Tribunal General Regulatory Chamber Information Rights against a refusal to permit disclosure by the Information Commissioner. He was successful the first time at the First-tier, but then it was discovered the Tribunal was improperly composed and the whole matter was reheard and the decision eventually given on 17 November 2022.

The case is well worth reading as it sets out the importance of the public interest in openness and it may be one of the repercussions was the final publishing of Penn’s Report.

However, bearing in mind Mr Davies made his application for a freedom of information request in October 2019 it took him over three years to succeed.

What is ironic is one of the arguments against disclosure made by the South Essex Council is that the local audit introduced by the Local Accountability and Audit Act 2014 (2014 Act) provided accountability. As keen governance and finance lawyers will know the local audit regime is a total failure. Do read Grant Thornton’s recently published report ‘About Time’ (March 2023)^[iv] on the failure of local audit. It is an excellent introduction to the serious financial and cultural issues local government is facing. Below is a table of just how bad the situation is.

Number of completed Local Audits

Source Table 1 Grant Thornton 2023

You can see from the table that the majority of accounts are not just late, they are years late. So notwithstanding argument in Davies, the 2014 Act is not providing a safeguard for public finances, and furthermore if legal objections gain traction as a new orthodoxy so as to prevention of publication of best value reports or they are severely redacted, now that local audit has on the clear evidence collapsed, how does the Monitoring Officer know what the real picture is, particularly if the Finance Director may not know either because the Local Auditor is bogged down in several years behind with the accounts. Very worrying.

Recent Reports and Legal Advice

One phenomenon I have noticed of late is the singling out of internal council legal services/Monitoring Officer for blame. We saw it with Liverpool [see my 9 April 2021 article Deja Value all over again [i] – The Best Value Report on Liverpool City Council (localgovernmentlawyer.co.uk)]. Now we have seen it again with Richard Penn’s report and not forgetting the recent report into Sheffield Council’s tribute act to George Washington in needlessly cutting down many healthy street trees [see Sir Mark Lowcock KC March 2023 Sheffield Street Trees Inquiry].

Let’s digress and look at Sheffield first. At para 664 the Sheffield Street Trees report says:

The wider point is that the Council consistently chose to use legal options without thorough consideration of alternatives and did not consider whether this legal action was a reasonable use of their authority. For example, when choosing to seek an injunction, the Council’s considerations covered the likelihood of success in court, but did not consider the broader, relative likelihood of whether different options, legal and non-legal, would resolve the dispute. The Council’s legal team considered what legal options were available but did not adequately consider whether these options would have the desired outcome.

And para 949:

…There also appears to have been a disconnect at times between the governance system for the contract and that of the Council’s most senior management boards. This also meant that checks and balances on the use of a local authority’s power did not always function as well as they could. While the Inquiry did not find that the Council exceeded its authority or acted unlawfully, the relationship between the Monitoring Officer, Chief Executive and Executive Directors could have provided a greater level of challenge over whether the Council was using its authority wisely, proportionately and appropriately. For that, the Council’s senior leaders bear responsibility…

So, the legal advice was right. Indeed, the Sheffield Council legal advice was scrutinised by an eminent KC and a renowned local government Law firm, and nothing was found wrong with the legal advice. With respect to the street trees author, legal services for many authorities are not at the top decision-making table and in the absence of specific instructions would be considered acting well out of scope to discuss whether action that was lawful was a reasonable use of authority beyond the legal consideration of Wednesbury unreasonableness or as Lord Diplock called it ‘irrationality’.

Now look at Croydon and the Penn Report. While the names and places were redacted, Penn’s report redactions can easily be unscrambled by the simple device called ‘Google’ and a search of Council Committee reports/ minutes within a timeline reveals much and of course some officers are full Council appointments! So, I don’t see why it could not have been published earlier.

Evidence of the Monitoring Officer involvement and their actual performance was limited bar one curious example given by Penn:

…for example when Croydon decided to sell off an important part of its heritage in 2013 – a valuable ceramics collection^[v] – Interview 56 had been appalled and had tried to get it ‘called-in’. Interviewee 56 had discussed it with the then Monitoring Officer who had told him that as the proposal was about selling something rather than buying something it could not be called in. That had been the wrong advice but as it was the advice of the Monitoring Officer there was nothing that Interviewee 56 could do about it so the sale went ahead…

Penn Para 13.21

It appears from news media at the time that the items were sold for less than the estimated value and Croydon faced action for expulsion from the Museum Association^[vi]. Furthermore, in what we would now know to be a cruel twist of fate, the funds from the sale were then earmarked for the Fairfields Hall restoration which was itself subject to a report in 2021 produced by the Local Auditor^[vii].

Having looked across the Report, it is notable how Penn singles out the Monitoring Officer with a ‘photomontage’ picture more of personal subjective qualitative snapshots by observers giving their opinion rather than by documented factual evidence.   

Conclusion

I have argued the Monitoring Officer seems to be getting a hard press in recent reports.

The Penn report reads in part like a report drafted for a JNC competency performance management process. It’s quite dated. Time marches on. We already knew Croydon was dysfunctional. Grant Thornton told us. The Head of Paid Service and the lead politicians have gone. The Monitoring Officer(s) has gone too. The problem is if the lawyers ‘concerns’ about independent reports or Best Value Inspections mentioning individuals gets traction as a new orthodoxy, then we will never get timely intelligence as to exactly what is going on. Worst still the sucessor postholder(s) may wrongly be thought to be the ones referred to in the report, is that fair?

What about the public interest of the poor suffering Croydon Council taxpayer? The Penn report should have been published no later than March 2022 so the voters could have learnt more about their council before they cast their vote.

Dr Paul Feild is the Principal Standards & Governance Solicitor working in Barking & Dagenham Legal Services. His 2015 Doctor of Business Administration thesis was ‘How does Localism for Standards Work in Practice? The Practitioner’s View of Local Standards Post Localism Act 2011’. He researches and writes on finance and governance issues and can be contacted This email address is being protected from spambots. You need JavaScript enabled to view it..

^[i] Croydon has the most expensive Town Hall in England costing £144m. The Times, 23 February 2023

^[ii] Editor of the Bureau of Investigative Journalists

^[iii] Thurrock Nub Home | Thurrock Nub News

^[iv] https://www.grantthornton.co.uk/globalassets/1.-member-firms/united-kingdom/pdf/publication/2023/about-time-local-authority-reports.pdf

^[v] I’m surprised there is no mention to whether the Riesco gift was subject to restrictions on disposal.

^[vi] Museum Association reported – “Croydon Council’s sale of 24 Chinese ceramics from its Riesco Collection has fallen short of its £13m target and is on course to raise less than half of the anticipated amount for the council. Seventeen lots were sold through Christie’s in Hong Kong this morning, fetching £8.24m in total. That figure includes buyer’s premiums, which amount to 22.5% of the value of each object sold and go directly to the auction house. Commission, transport, catalogue and other related costs will also be deducted from the amount, which should leave the council with approximately £6-£7m from the auction. A spokeswoman from Christie’s said that there was still a chance that the seven remaining lots would sell post-auction” (Museums Association 27 November 2013). The council planned to use the money raised by the sale to refurbish local arts centre Fairfield Halls talk about throwing good money after bad…

^[vii] Report in the Public Interest Fairfield Halls | Croydon Council