Reshuffle puts Streatham MP on the spot over council funding

Steve Reed will probably feel more at home at MHCLG, but is the former leader of Lambeth Council who as an MP was a bystander over ‘slum-like’ conditions at Regina Road and the bankrupting of Croydon up to the job of delivering on housing targets and local government finances?

The government’s intervention in Croydon Council’s £1.4billion toxic debt has now been placed in the hands of a Croydon MP, after Steve Reed was last night named as the new Secretary of State at the Ministry of Housing, Communities and Local Government.

Reed, the MP for Streatham (and Croydon North when he can be bothered), has been moved sideways from DEFRA in Keir Starmer’s emergency cabinet reshuffle prompted by the resignation of his deputy PM, Angela Rayner.

It was on Rayner’s orders in July that government Commissioners were sent into Croydon to get to grips with the council’s “runaway” spending under failed Tory Mayor Jason Perry.

Perry was allowed to bleat “No fair!” on local television news again this week, like a spoilt brat who has dropped his ice cream cone. The man who was elected in 2022 on a promise to “Fix the finances” failed to mention to BBC London last year’s £30million budget overspend, his £136million bail-out from government earlier this year or his 27% hike in Council Tax all on his watch.

Croydon has been building up its debt mountain for almost 20 years, including more than £800million accrued by a previous Conservative administration, when Perry was a cabinet member in charge of “planning, transport and sustainability” and throwing money at John Laing for the disastrous CCURV joint venture under which the council offices, Fisher’s Folly, were built.

Today, Perry’s only solution to cash-strapped Croydon’s debt problem is an unprecedented write-off of at least some of the local authority’s liabilities that he had do so much to create.

Last night, on the announcement of Reed’s move to MHCLG, the part-time Mayor tweeted:

“Congratulations to [Steve Reed MP] on his appointment as Secretary of State for Housing, Communities and Local Government.

“Steve knows all too well the challenges local government, London and Croydon faces. I hope we can work together in the interests of our borough to support the residents we both serve.”

Perry went to much greater lengths to grovel to the Establishment over the death of the Duchess of Kent (Who she? Ed): “Her quiet dignity and lifelong service, particularly through her work in music and education, have left a lasting legacy across the country,” apparently…

With lame duck Mayor Perry’s term of office rapidly running out of road, perhaps the plastic guttering salesman is after a lucrative contract for Buck House, or some kind of gong for “services to local government” after next May’s Town Hall elections?

One thing to emerge from Perry’s latest appearance on BBC London was the notion that the appointment of Commissioners in Croydon was in some way “politically motivated”. Clearly, Perry is some kind of genius…

Perhaps of more relevance to most of Croydon’s hard-pressed residents was the message to Reed from one of Croydon Tories’ young bucks, Councillor Alasdair Stewart, who posted: “Congratulations to Steve Reed MP – MP for Streatham and Croydon North, and formerly MP for Croydon North 2012-2024 – on his appointment as Secretary of State for Housing, Communities and Local Government.

“This is a hugely important government role for Croydon, and with his first-hand knowledge and experience of Croydon Council’s past problems, I look forward to Steve working with Mayor Jason Perry to finally deliver the long overdue financial support that Croydon Council needs to resolve the legacy of toxic debt, and most importantly treating Croydon Council fairly compared to other local authorities, which we sadly didn’t see under Angela Rayner.”

There’s some subtle messaging here, linking Reed to his long-time political mate and the bankrupter of the borough, the discredited Tony Newman, Croydon’s council leader from 2014 to 2020, as well as presenting some valid argument over funding Croydon fairly.

Take this example: in 2022-2023, Croydon received a government grant equivalent to £239.25 for every resident in the borough, while Lambeth, our next door neighbours, got £481.73 per resident.

Thing is, in almost 13 years as MP for parts of Croydon, Steve Reed has barely made a peep about the disparities in funding between this borough and the one where he was council leader for six years until 2012.

Reed is, of course, part of the Brixton Town Hall chumocracy which, following Rayner’s political tumble, has taken an even tighter grip on power in Downing Street through his former Lambeth council colleague, Morgan McSweeney, the PM’s Chief of Staff.

As a co-founder first of Progress, then of Labour First, the parties-within-a-party, Reed has become a feared figure in Labour circles, through his and his colleagues’ sense of entitlement and the manner that they sometimes conduct themselves, almost as if they are above the law.

Such as the time when Reed was in charge in Lambeth and he got council staff to spy on the emails of colleague councillors, or his association with Joel Bodmer, the candidate who stood down from Croydon East parliamentary selection when the police were called in to complaints over data abuse, and his knowledge of the illegal hack committed against this website in 2021.

The move to head the local government and housing department will undoubtedly suit 61-year-old “townie” Reed, who accepted an OBE in 2013 for that most nebulous of citations, “services to local government”.

The repeated challenges to his decisions on agriculture and the water industry, from Jeremy Clarkson and the farming lobby and Feargal Sharkey and environmentalists, during his year as Environment Secretary left Reed appearing sorely out of his depth. Look out on eBay for a bargain buy of “pair of size 9 Hunter-style wellies, as new, worn just once”, as he tries to unload the now redundant gift from Labour Peer Lord Alli.

Reed is now part of the churn at the upper echelons of government. He is by some counts the 15th minister in charge of housing in little more than 12 years (Gavin Barwell, another Croydon MP, was the fourth in that long list of failures, from 2016 to 2017, at the time of the Grenfell Tower disaster). That drift in leadership is indicative of the systemic problems with the crisis in that sector.

That Reed was the MP for the area where council flats at Regina Road and their appalling, “slum-like conditions” came to light, demonstrating the poor management at the council run by his mates Tony Newman and Alison Butler and his own ineffectualness as a parliamentary representative, will do nothing to inspire confidence in his abilities as a cabinet minister.

Nor will his legacy on housing as council leader in Lambeth, which has been subject to repeated warnings and penalties from independent agencies.

As Brixton Buzz has reported today, “One of his signature initiatives was Lambeth Living, an Arms Length Management Organisation… established in April 2008 to manage and improve over 33,000 council homes…

“Despite initial progress in securing funding and implementing basic housing improvements, Lambeth Living struggled. Financial overspends and criticisms over service delivery mounted.”

“On closure,” Brixton Buzz says, “Lambeth Living reported an overspend of £767,000 and a trading loss of £575,000.” Oh…

And to think that Reed supported the appointment in Croydon of former Lambeth employee Jo Negrini, the “mastermind” behind Brick by Brick, the failed housing company that did so much to bankrupt the council.

Reed was also the co-chair of the Vauxhall Nine Elms Battersea Regeneration Board, which coordinated plans for one of Europe’s largest urban redevelopment schemes, promising 16,000 new homes, 500,000 sqm of commercial space and 27,000 jobs.

As at April 2024, only 6,685 homes had been completed, with 4,960 under construction and 462 awaiting planning permission. Affordable housing provision has been minimal: only 560 of 3,444 homes at Battersea Power Station are “affordable”.

Housing experts, such as Peter Apps, from InsideHousing.com, are certainly wary. “I expect Rayner’s replacement to be hit with pretty ferocious lobbying to remove or reduce post-Grenfell reforms to ‘get Britain building’,” Apps said last night.

“The Building Safety Regulator is very necessary. Anyone who doesn’t think so should go have a look at the standard of construction on 2010s blocks, or better yet, live in one.”

Given Reed’s craven capitulation to the water monopolies when he was Environment Secretary, Apps probably has good cause for concern.

As might all Croydon residents: will the MP who was a bystander as his constituents lived in squalor on Regina Road, and who did nothing while his political friends bankrupted the borough, now step in to put things right?

Or might that be too close to an admission of culpability by Reed?

More Reed: Minister Reed attended unminuted meetings with water bosses

More Reed: You can take Steve Reed to water, but you can’t make him think

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