WALTER CRONXITE reports on the latest multi-million-pound overspend by the council-owned ‘house-building’ company that has yet to build a single new home
The refurbishment works being carried out on the Fairfield Halls arts complex by Brick by Brick will cost at least £41million, according to an official council Freedom of Information response.
That’s £11million over budget for the troubled, slow-running project, which is already nine months overdue and has at least another six months to go until Brick by Brick, the council-owned “house-builders”, are finally off-site.
The council even attempted to suppress the information about the huge overspend on the Fairfield Halls, deliberately breaking Freedom of Information Act laws by withholding its response for longer than allowed.
The council’s response, to an enquiry submitted in January by an elected councillor, was only released yesterday. That prevented the multi-million-pound overspend becoming a matter of questioning for staff from Brick by Brick on Thursday, when they appeared before other councillors in a pre-application presentation to the planning committee in the Town Hall chamber.
The FoI had been submitted by Robert Ward, the Conservative councillor for Selsdon and Addington Village, apparently in response to Inside Croydon’s reports which had estimated that the Fairfield Halls refurbishment, which was supposed to have taken two years and cost £30million, would now be more than a year late in completion and probably be costing at least one-third more than budgeted.
The council’s formal response, dated March 1, 2019, states:
“Works to Fairfield Halls are funded by Brick by Brick under a cross subsidy model using the development value of surrounding land.
“Brick by Brick have provided an estimate of net construction cost for works to the Halls (inc additional asbestos related works) and surrounding enabling infrastructure of c£41m. This additional investment is being met by Brick by Brick as the developers of the scheme.”
The final line is the height of disingenuity: Brick by Brick is wholly owned by Croydon Council, and derives all its finance through loans and equity from the council, which also owns the Fairfield Halls. So this £41million “being met by… the developers of the scheme” is very much public money.
Brick by Brick’s pre-app presentation on Thursday was about its plans to build more than 400 flats… sorry, “luxury apartments”… between the Fairfield Halls and Croydon College. Its original scheme, involving only half as many homes, crashed last year when Brick by Brick failed to secure the purchase of the Barclay Road Annex building from Croydon College, after three years’ negotiations.
The build and delivery of these hundreds of homes, which ought to have started in parallel with the Fairfield Halls refurbishment in 2016, now won’t begin before 2020, with the Brick by Brick properties not coming to market until 2022 at the earliest.
Any profits from the sale of those Fairfield flats is supposed to be used to defray the costs of the refurbishment of the Halls. Only now, it will need at least an additional £11million in profits to cover those ever-rising costs.
In Brick by Brick’s latest business plan, a finalised version of which was produced last week, they blamed “Brexit uncertainties” for the increasingly difficult housing market in London. The company – formed in 2015 but which has yet to deliver a single new home – has meanwhile also asked Croydon Council for an additional £78million-worth of loans.
The council’s FoI response, terse and concise for fear of giving away any additional, helpful information to the public about the spending of public money, does betray a couple of possible lines of interest.
The reference to “net construction cost” suggests that contractors hired by Brick by Brick may be subject to some penalty payments, perhaps for the late completion of their work. This, therefore, also suggests that the total bill already exceeds £41million.
During the first year of the refurbishment, any real progress was hard to discern, and this has since been explained by those involved with the project as being related to the “additional asbestos related works” referred to in the FoI response.
The notion that 21st century builders dealing with a 1950s-1960s-built structure were in some way surprised to discover that asbestos had been used in its construction may seem to most reasonably minded people absurd.
Which is why the decision, made by people in the most senior positions at Croydon Council to place the sensitive and prestigious Fairfield Halls project into the hands of the unproven operators at Brick by Brick is now looking like a £11million blunder.
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