KEN LEE reports on a hurried closing of ranks at Fisher’s Folly over the loss-making council-owned house-builders
Asking the council executive director who has been in charge of Brick by Brick’s piss-poor performance for the past four years to draw up the terms of reference for an urgent review of its failing business is not a conflict of interest.
That’s according to Katherine Kerswell, the interim chief executive of the cash-strapped council, in a written reply to a resident who raised the blatant flaws that are evident in getting Shifa Mustafa to draft the terms of reference for a review of the council’s businesses.
Until the start of September, Mustafa had even been on the board of directors of Brick by Brick.
But Kerswell has revealed that Mustafa’s work on the review will be given to “the external auditor to comment on, amend and approve”.
Inside Croydon was first to report how Brick by Brick’s performance was to be subjected to some form of review from a recommendation of the council’s emergency budget, which was passed by full council on Monday night.
To win round the Tory government and sceptical civil servants at the Ministry of Housing, Communities and Local Government as it begs for bail-out millions, the council wants to demonstrate a willingness to chuck overboard from its sinking ship some key parts of the policies, potentially including Brick by Brick.
But by putting Mustafa in charge of drafting the terms of reference, the council’s leadership may have deliberately compromised the “independent” review process, ensuring that the running of Brick by Brick is not subjected to too close a scrutiny.
Mustafa, after all, will know where the company’s vulnerabilities lay.
Mustafa was appointed exec director for “place” in October 2016, with her brief including house-building, the Westfield development and the refurbishment of the Fairfield Halls. The latter project was handed to Brick by Brick, who eventually delivered it incomplete and unfinished, 15 months late and at least £13million over budget.
Brick by Brick was the brainchild of the now-discredited ex-CEO, Jo “Negreedy” Negrini, and its model of turning council-owned playgrounds, open spaces and car parks into private housing has been enthusiastically supported by Blairite council leader Tony Newman and cabinet member for finance, Simon Hall.
Despite being lent £260million by Croydon Council, Brick by Brick has failed to make a profit in five years, nor delivered the volumes of homes for social rent that have been promised.
Formed in 2015, by the end of 2019 Brick by Brick had delivered the grand total of three council flats.
And the Labour-run council’s previous performance in keeping Brick by Brick in check has been, at best, slack.
Previously, when Brick by Brick’s managing director, Colm Lacey, has rocked up at council scrutiny meetings, he has been allowed to withhold from elected representatives important financial details, redacted from the company business plan. He even managed to lie to the scrutiny committee – repeatedly – over the below-market-value sale by the council to his company of development sites. Notoriously, this included six sites sold for just £1 each. Despite this, the chair of scrutiny, Newman loyalist Sean Fitzsimons, has failed to take any action.
The possibility of an independent review of Brick by Brick’s activities, therefore, was broadly welcomed, at least, that is, until Inside Croydon raised the possibility of an in-house fix, by allowing Mustafa to set the terms of reference, effectively to be allowed to mark her own homework.
When this was raised with Kerswell, however, the interim CEO claimed that her appointing Mustafa to draw up the terms of reference was not a conflict of interest.
“The terms of reference for the independent strategic review of the council’s companies and other entities… has been put together by officers in the Place directorate working to Ms Mustafa under my direction.
“There is no conflict of interest in the work I have asked Ms Mustafa to do in drafting the terms of reference for other senior officers and the external auditor to comment on, amend and approve. Her knowledge of the range of the companies and other entities that we have … agreed to be reviewed was important in ensuring all the elements were identified and covered in terms of reference.
“She has given me a draft which I have reviewed and which has now been shared with the Director of Finance, a financial advisor to the council and our external auditor to ensure we are covering all the areas that need too be reviewed.
“The review will be carried out by an externally procured independent company and I am appointing an independent very experienced ex-chief finance officer to act as the client to the review and to ensure it delivers.”
Inside Croydon has asked the council when it might be publishing the terms of reference, drafted by ex-BxB director Mustafa, for the independent review of Brick by Brick. Will await a response.
Katherine Kerswell has refused to give an interview to Inside Croydon.
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