About five years ago, Robert Jenrick was being considered by local Conservatives as their possible candidate for Croydon South, until an even safer safe Tory seat came up in Newark.
So it is perhaps with added interest that Jenrick, now the Secretary of State for Housing, Communities and Local Government, will have discovered in his in-tray in his new Marsham Street offices a letter asking him to investigate the under-value sales by Croydon’s Labour-run council of a swathe of land and property in the borough.
As Inside Croydon first reported in March, Croydon Council sold more than two dozen plots of land to its in-house house-builder, Brick by Brick. Six parcels of land were sold for £1 each. Many of the sites were sold already with the considerable added value of planning permission – which had been granted by the council.
The heavy discounting of these sales of public property to Brick by Brick are estimated to have saved the struggling development company at least £10million on its initial development costs.
On one of the under-value sites, Brick by Brick is now marketing three-bedroom terraced houses on the private market for £600,000. Croydon Council sold the site to BxB for just £250.
The council, meanwhile, has so far refused to release its own valuation reports on these properties.
Jenrick took up his new job in Boris Johnson’s government this week. The letter seeking an investigation into the under-value sales is from Chris Philp, who was selected as the Tory candidate for Croydon South.
Dated July 17, the letter was addressed to Jenrick’s predecessor, James Brokenshire.
In his letter, Philp writes, “I am concerned that Croydon Council has been selling land at under-value to Brick by Brick Croydon, a company which is wholly owned by the Council, without your consent which they are legally obliged to obtain.”
Philp, left, included a list of 28 sites, on which Brick by Brick is building 1,093 homes. “As you will see,” Philp’s letter continues, “many have been sold at patently below market value, eg Kingsdown will have 34 new homes and was sold for just £1.
Philp (left) had previously been given confirmation through a question in the House of Commons about whether Croydon Council had never sought permission for selling the public property at less than its market value. Section 123(2) of the Local Government Act 1972 says that “Secretary of State approval should be sought when, subject to a de minimis under-value of £2m (Circular 06/03), land is to be disposed of at under market value”.
Council execs, such as Jo Negrini, the £220,000 per year CEO who has championed the BxB model, claim that when the properties are sold, all of the profits will come back to the company’s sole shareholder, the council, where the money will be used to pay for much-needed local services. The council has also tried to make a link between the value of its property sales and the provision of “affordable” housing. Yet on some of the cheaply sold BxB sites, there is no “affordable housing”, and certainly nothing resembling social housing or a council home.
Brick by Brick has been a flagship policy of the Town Hall Labour administration under Tony Newman and Alison Butler in which, since 2014, they have built not a single new council home for social rent. Croydon has 2,000 families on the council housing waiting list.
And while Negrini and her appointee, Colm Lacey, have been the people driving the Brick by Brick project from within the council headquarters, if it is found that Croydon has broken the law for failing to obtain permission from the Secretary of State for under-value sales, it is elected councillors, such as Newman and Butler, who would have to face the music.
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