London borough backs legal action to recover six-figure settlement paid to former chief executive

The London Borough of Croydon is to pursue legal action in a bid to claw back a £437,000 settlement handed to its former Chief Executive, Jo Negrini, as part of "unprecedented action to hold former senior leaders to account for misconduct, wrongdoing and failures in governance that contributed to the authority's financial crisis".

In a statement issued today (24 March), the council announced that members had backed legal action to recover as much of the settlement "as is legally possible". It said the move was "thought to be a first for local government".

A council committee approved the settlement in August 2020. In December 2022, the council said that decision was lawful, but admitted that it should not have agreed to pay the settlement as there were "significant failings" in officer advice on the decision.

Today's decision to take legal action against Negrini is based on recommendations made to the council's Appointments and Disciplinary Committee.

Chaired by Croydon's Executive Mayor, Jason Perry, the committee considered these alongside the findings of the Kroll report – a forensic investigation into the governance concerns and potential wrongdoing in relation to the refurbishment of the Fairfield Halls.

According to the statement, the council has been awaiting the findings of the Kroll report – the final report into governance failures at the council – before determining what action to take.

Croydon has been beset with financial troubles since 2020 when it issued its first section 114 notice. It has issued three such notices in total.

Last week the Secretary of State for Levelling Up, Housing and Communities, Michael Gove, announced that he is "minded to intervene" at Croydon over concerns that it is not meeting its Best Value Duty.

Commenting on the legal action,  Perry said: "The scale and severity of Croydon's financial collapse is unprecedented and that is why we are recommending unprecedented steps."

He later added: "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.

"They must be held to account – that is why I have consistently pushed for the council to take the strongest possible action against those responsible. 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."

Perry said he plans to write to Gove, the Committee on Standards in Public Life, the Chair of the House of Commons Select Committee on Local Government and the Chartered Institute of Public Finance and Accountancy (CIPFA), asking them to urgently review councils' powers to hold individuals to account for catastrophic failures in governance.

The council will also be referring a series of reports on the council's failures to the police; and referring individuals to relevant professional institutions who operate a disciplinary code in relation to their membership, according to the statement.

Adam Carey