There are reasons why local authorities resort to setting up separate companies to perform some council functions. Transparency is not one of them, reports our housing correspondent, BARRATT HOLMES
Croydon Council has appointed a director of lighting contractor Skanska and a property developer who has worked with the Qataris on controversial speculation schemes to the board of a new development company which is supposed to be overseeing £250-million-worth of house-building in the borough.The council’s company is called Brick by Brick.
According to the propaganda department embedded in the dark heart of the council HQ at Fisher’s Folly: “The council’s own development company, Brick by Brick Croydon Limited… has been set up to allow hundreds of families to be moved into more affordable and comfortable new-build homes. Smaller homes are also being built to allow people to downsize to more manageable homes, therefore freeing up family accommodation.”
But, as you might expect, there is more to it than that.
There have been previous council-run firms, such as the Croydon Economic Development Company, which was wound-up long ago, or CCURV, the extremely poor-value joint venture with John Laing. Both proved to be flops which have cost the Council Tax-payers of Croydon hundreds of millions of pounds.
Brick by Brick was formed last May, but its first real activity was in the appointment of four directors at the end of January this year.
The managing director and CEO of Brick by Brick is Colm Lacey, who also happens to have a full-time, generously salaried job as the council’s director of development. Lacey is responsible for the day-to-day running of Brick by Brick as well as securing funding, land acquisition and development management.Lacey and his Croydon Council boss, Jo Negrini, tripped off to Cannes last month to hob-nob with international property speculators at MIPIM, the annual developers’ piss-up (or “booze and hookerfest”, according to Private Eye). It is fair to assume that the costs of this trip were paid by the council out of Council Tax, and not incurred as business expenses for Brick by Brick.
It was while in the South of France that Lacey told the trade press, “We’ve got a massive housing need across both private and affordable tenures – particularly affordable – and it’s not being met by the market as it delivers in a traditional way.” Which wins this week’s “No Shit Sherlock” Award.
Lacey is joined on the Brick by Brick company board by Lisa Taylor, the borough’s head of finance. So that’ll be handy.
And there are two “independent” directors. Though neither is all that “independent”.
One is Jayne McGivern, the one-time chair of CCURV (such an impressive track record on behalf of Croydon), a former director of building firm Redrow (think of all those old contacts), and who was recently appointed to chair the government Defence Infrastructure Board (lots of juicy deals to be done with the transfer of public property into private hands there, no doubt).Importantly for Croydon residents, McGivern is also a board member of Skanska, the council contractors who have plagued the borough with their slow and often shoddy delivery of new street lights.
The other not-so-independent director of Brick by Brick is Jeremy Titchen, who has spent much of the past three decades buying up property in central London on behalf of overseas investors, particularly those from Qatar.
Much attention on London’s housing crisis is being focused on buy-to-let investors from overseas pushing up property prices to unaffordable levels. So Titchen, after seven years working for Qatari Diar, including on the schemes at Chelsea Barracks and in Grosvenor Square, might be seen as part of the problem facing London, rather more than part of the solution.
No where on our “open and transparent” council’s website can any mention of these Brick by Brick director appointments be found. No where is there any announcement of who it was who recommended McGivern and Titchen to oversee the handling of Croydon rate-payers’ property and finances, or the process under which they were appointed.
So should Croydon residents be reassured when Lacey told those attending MIPIM that the business structure of Brick by Brick, “allows the council to extract value from the core components of development activity – funding, building, selling – in a very efficient way”?
Lacey also said: “Traditionally such value would leak out of the borough. The Brick by Brick model maximises the return to Croydon residents, and allows the council to reinvest in core services at a time when other budgetary sources are constrained.”
Certainly, on building social housing, Croydon has a lot of catching up to do.
The council passed into Labour control in May 2014, when they inherited a somnambulant house-building programme which saw just 12 new homes built in the first 18 months of the administration.
The council recently announced the building of 74 more homes – from two-bedroom flats to four-bed family houses – in Fieldway, Coulsdon East, Shirley, New Addington, Heathfield, Kenley, Waddon, Bensham Manor and Broad Green wards. Nearly half the new occupants of the homes were previously homeless.
But they have not become tenants in “council houses”, in the old sense of the phrase. Some of the properties are not even “social housing”. The local council is tightly constrained in how it may raise funding for property, even on land it owns, all thanks to four decades of Thatcherite policies which have created the current housing crisis and the house price inflation which is blighting millions of lives, especially in London.
The height of our Labour-run council’s aspirations in 2016 is that 50 per cent of the new homes built should be “affordable”, in itself a most misleading phrase, especially in London, as it means costing 80 per cent of the market rent. Which in Croydon could be about £900 per month.
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