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£63m ‘slippage’ in council budget caused by Brick by Brick

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Simon Hall, the council cabinet member responsible for Town Hall finances, has admitted that the slow progress being made by Brick by Brick, Croydon’s wholly owned housing developer, has created a £63million “slippage” in the council’s already under-pressure budget.

Labour councillor Hall was being questioned at this week’s Town Hall meeting over what one of the opposition councillors, Helen Pollard, described as “a massive variance” in the council’s originally budgeted figures, and the revised amounts presented to cabinet this week.

Hall offered a cheery, “jam tomorrow” explanation, while Tony Newman, the council leader chairing the meeting, did not allow any further questions on the matter.

It will have not escaped observers that this meeting came just a week after Newman and his ruling Troika which controls the Labour group at the council managed to push through a 5 per cent increase in allowances for cabinet members, with special pay hikes of up to £20,000 for favoured Tony’s cronies.

The harsh reality is that Brick by Brick’s failure to deliver even a single new home in the three years since the company was established could mean that Croydon’s Labour-run council will be forced to make more, and deeper, cuts in other council services over the next two years.

According to the council’s own report, “2018-2019 is the third year of the four-year funding agreement [with central government] and the council continues to face a level of uncertainty regarding the medium term. Savings have been identified for 2018-2019 and 2019-2020 and there is currently an expected budget gap of £6.3m in 2019-2020 at this stage.”

Brick by Brick is using £36.9million-worth of loans from the council to build on council-owned land and property.

This week, Newman’s deputy leader, Alison Butler, the cabinet member for housing and regeneration, claimed, “No other London borough is leading the development of genuinely affordable homes on the scale that we are in Croydon.”

Established in 2015, Brick by Brick has so far built precisely… zero homes. So Butler might have a point.

Simon Hall: BxB has caused a £63m ‘slippage’

Planning consent has been granted for 43 sites around the borough for Brick by Brick schemes, and work has begun to get underway on 10 of these.

With no revenue coming on-stream from Brick by Brick, it has left a multi-million-pound gaping hole in the council’s budget.

When challenged on this, Hall was forced to admit: “The bulk of that variance is the slippage there’s been on Brick by Brick, but through 2018-19 that’s really motoring and we’re going to be delivering those homes.”

So that’s alright then.

Except it probably isn’t.

Although it was supposed to deliver 50 per cent affordable in its first tranche of 1,000 new homes, Brick by Brick’s own reports suggest that in fact, more than 60 per cent of the homes it is building will be put on the private market, leaving even fewer available to genuine Croydon locals, whose money has been used to pay for the homes to be built.


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