Questions have been asked in the House of Commons about the legality of Croydon Council’s land sales to Brick by Brick, and the answers make for uncomfortable reading for the Town Hall leadership, as KEN LEE reports
Croydon Council may have acted unlawfully by selling off public-owned property at vast discounts to Brick by Brick, its in-house building company.
Council CEO Jo Negrini: failed to answer questions from MP about her secret subsidy sales to Brick by Brick
That’s according to a written answer given to questions raised in the House of Commons about the council’s multi-million-pound secret subsidy on land sales to Brick by Brick.
In March, Inside Croydon reported how 24 packages of land, most already with planning permission, had been sold at less than the market rate. This included six plots which were sold for just £1 each.
Even the site with the biggest price tag, the Lion Green Road car park in Coulsdon, which the council sold to Brick by Brick for £1.5million, is reckoned to have gone for well under the full commercial market value. Sold by Croydon Council after having been granted planning permission for 157 homes by Croydon Council, the large site is reckoned to be worth at least £5million, perhaps as much as £7million.
The property sales, with Brick by Brick using millions of pounds of funding borrowed from Croydon Council to buy land owned by Croydon Council, went through between March 2018 and January this year.
According to the junior minister for housing, Kit Malthouse, in a written answer to Croydon South MP Chris Philp, “Public bodies should generally dispose of surplus land at the best possible price reasonably obtainable.”
And Malthouse added, “Secretary of State consent is required if a local authority wishes to dispose of housing land… at less than best value, including disposal to a local authority housing company.”
That was on May 7.
Philp immediately wrote to Jo “We’re Not Stupid” Negrini, the council’s £220,000 per year chief executive, to enquire when her council had indeed obtained Secretary of State approval for the cut-price land sales.
According to Philp’s Westminster office, nearly three weeks later, and Negrini has yet to provide even a straight forward “yes” or “no” response to his enquiry.
Brick by Brick was established in 2015, the brainchild of Negrini and her exec director for development, Colm Lacey, a council employee since transferred to BxB’s staff as its CEO.
Listen to how council leader Tony Newman has to be asked FIVE times by BBC London presenter Eddie Nestor before he would admit his Labour-run council is not building any council homes:
Croydon has borrowed at least £340million of public cash at a low rate of interest from the Public Works Loan Board, which it has loaned on to Brick by Brick on favourable terms to kick-start its business – building 1,000 new homes. More than half of these are going straight on to the private market, with some houses being sold for £600,000.
Croydon has built no new council homes since 2014. Brick by Brick’s business model relies on selling homes on the private market, in theory to pay for the building of “affordable” homes. The reality is proving somewhat different, with 71 per cent of BxB units that are due to be completed in 2019 going on the private market (the council’s target is supposed to be 50 per cent of all Brick by Brick homes are to be “affordable”).
Tony Newman may need that hard hat if it is confirmed that land sales to BxB did not get government approval
And of the 38 build schemes on Brick by Brick’s books, every one of them has been delivered late or is behind schedule, causing further cashflow difficulties for Lacey and Negrini, even with the multi-million-pound secret subsidies on the council land sales.
Section 123(2) of the Local Government Act 1972 is pretty clear that “a council shall not dispose of land… for a consideration less than the best that can reasonably be obtained”.
Yet the detail of Malthouse’s written response, as reported in Hansard, ought to cause even more consternation within Fisher’s Folly and the Town Hall next door.
Council leaders, rather than council executives, are the ones who normally have to carry the can for acting recklessly with public property and failing to abide by laws intended to protect public property from misuse.
The most notorious case in recent times is that of Dame Shirley Porter, the one-time leader of Westminster council, who faced £26million-worth of surcharges in the 1980s when she gerrymandered council homes to boost her party political prospects.
Porter was an heiress to a fortune from Tesco. Newman, Croydon’s £55,000 per year council leader and sometime organ player in a rock band, could face a very long time busking on George Street if he ever has to make good the difference between the council’s land sale prices and their true market value.
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You would have thought they would have received a cast iron Legal opinion to enable their Authority to undertake these actions. Yet it all seems the haste to keep the Brick by Brick fiasco solvent may now be it’s undoing as the Council has acted beyond it’s powers. Unfortunately the surcharge on Councillors was abolished by the Blair administration in 2000. So despite their chronic incompetence over this matter and a complete lack of scrutiny by the opposition Councillors only the perpetrators if charged with this matter will not be financially penalised, but just found unfit to hold public office or practice in Local Government. Anyone watching the unfolding disasters of Croydon will have known that already. A reason why Central Government may not be too keen to pursue the Council is that so many councils of all political colours are now using Public Loan Work Board financing in ways that it was never designed and without the appropriate oversight. So such an action will just reveal the complete dereliction of duties by the Government too.
https://en.wikipedia.org/wiki/Surcharge_(sanction)
They’ll eventually use the appropriation of land methodology as the reason. Basically a fudge by the council to arrive at a best consideration of a pound. I guess it will be the head of the head of legal next on the spike. Jo No-morals-grini & Lousy lacey apparently made of that cheap material – teflon.
It has been suggested that Jo “We’re not stupid” Negrini thinks far too highly of her sometime Borough Solicitor, the over-promoted Jacqueline Harris-Baker, to ever allow any responsibility for a legal dropped bollock worth tens of millions of pounds to end up at her door.
But there’s always Sean Murphy “interim” …someone’s head will roll. When the well admired s151 officer “left’ everyone knew no one is safe as long as the double act reign
Not only have the council flogged their land at Negrini “We’re not Stupid ” values or as i prefer to think of it, at Ireland post crash bankruptcy values, they have failed to comply to the rules of a consented disposal. See below.
.. Well 38 is a little more than 5 if my maths serves me correctly.
(c) the disposal of land to a body in which the local authority owns an interest except:
(i) where the local authority has no housing revenue account; or
(ii) in the case of a local authority with a housing revenue account, the first 5 disposals in a financial year.
As I’ve said many times before one of the biggest failures of this administration is its inability to recruit the right people to key positions. This lack of focus comes from Tony Newman.
I know of someone who sat on Jacqueline Harris-Baker’s interview at the council. Her written submissions would not have got her a mid-grade GCSE. But calibre of the selection committee was such that this important point was not noted. You reap what you sow.
Good grief! I’ve just listened to the BBC link repeating the recent Tony Newman interview.
This man represents Croydon to the wider world? Surely not? ……Glib soundbites, lack of a grasp of the facts, bumbling delivery, unprepared, enviro-tokenism and his comments on Westfield??? We MUST get this mediocre person out of Croydon Councils most important office as soon as possible. He’s like a coach driver doubling as a tour guide.
What do Westfield execs think when they meet little bumbling Tony ???
He represents US ????