Scottish Conservative and Unionist councillors on Midlothian Council are calling for the Labour administration to be fully transparent over a £13 million deposit made to Croydon Council in April this year.
The group’s leader Councillor Peter Smaill highlighted the unacceptable risk involved at a meeting of the Council’s Audit Committee on Tuesday 8 December, pointing out that Croydon’s Labour council had become technically bankrupt, after issuing a notice last month to Central Government.
The section 114 notice effectively stated that Croydon will not be able to find the required resources to support spending going forward, meaning that Midlothian Council have no sense of where exactly the money will come from to repay the funds given to them, given that Croydon had racked up debts of £1.5 billion.
Councillor Smaill joined forces with his colleague Councillor Hardie and former councillor Peter de Vink to raise their concerns at the Labour administration of Midlothian’s massive expansion of money market operations, which are now close to £150 million. Mr de Vink, the Independent member of the Audit Committee, has objected to the Midlothian Treasury Policy of investing in high-risk local authority instruments ever since he became an Independent Councillor in Midlothian in 2012.
Commenting, Scottish Conservative Midlothian group leader Peter Smaill said: “It is astonishing that the Labour administration- if they even knew what was happening- and council officials thought this £13 million was a good investment, especially during the height of the Covid pandemic in April.
“It is clear that there is more behind this decision and the administration must be fully transparent over what has occurred in relation to millions of pounds.
“The public will be furious that this large deposit was given to a council who had racked up massive debts at a time when our own communities, businesses and residents need every penny of support.
“Shortly after Midlothian invested, a £440,000 payoff went to the former Croydon CEO.”
“We have seen in the past instances where other councils have been caught out playing ratepayer roulette with these sorts of deposits. Further answers are urgently needed over what Midlothian either knew or didn’t know, but should have known, about the already dire situation of Croydon Council.
“It is clearly in the public interest for there to be full disclosure on this issue.”
