EXCLUSIVE: Council was warned in 2017 of problems with the management of works at the borough’s flagship arts centre.
By STEVEN DOWNES
A report by the council’s internal auditors has raised very serious concerns over the mismanagement of the multi-million-pound refurbishment of the Fairfield Halls.
The report, by Mazars, is especially critical of Shifa Mustafa, the council’s executive director of Place, for her blatant conflict of interest in sitting on the management board of the Halls while at the same time holding a directorship of Brick by Brick.
Last week the council’s interim chief exec, Katherine Kerswell, sent in auditors from Grant Thornton to investigate where the money’s been spent after what was supposed to be a two-year refurb over-ran by 15 months, with ballooning costs thought to have reached at least £50million, plus a £9million dispute over payments with Vinci, the principal contractor.
A senior figure working for the council has suggested to Inside Croydon that some payments made during the bungled refurbishment may even have been unlawful.
But even before Grant Thornton go through the books on spending over the Halls, Kerswell will have seen a report carried out last year by Mazars, as part of the council’s legally required internal audit, that ought to have rung loud alarm bells throughout Fisher’s Folly.
But the November 2020 report from Mazars is not the first time they have issued a warning over the Fairfield Halls refurbishment: they had raised serious questions over the management of the project back in 2017 – even before the works had got underway in earnest.
Yet despite that audit report, no one at the Labour-controlled council under then leader Tony Newman took any action to address the mounting and expensive problems – not the ineffectual General Purposes and Audit Committee, nor the sleepy Scrutiny Committee.
Indeed, even through the Halls’ long-delayed re-opening, Newman and his numpties were hailing the refurbishment as some kind of great success, when in fact the cost implications of the bungled works now pose a serious risk that the Halls might remain closed permanently.
The council-owned Fairfield Halls were initially closed in July 2016 for the long-overdue refurbishment project which was budgeted by the council to cost £30million.
Eventually, 15 months late, there was a grand reopening attended by London Mayor Sadiq Khan and national treasure Judi Dench in September 2019. But last March, in common with arts venues across the country, the Fairfield Halls went into “hibernation” because of covid-19.
Mazars’ internal audit work was also delayed by coronavirus, but two months ago they delivered their damning report on the bungled project. “The licence for access to carry out works … issued to BxB did not include specific contract conditions relating to quality or deadline for delivery,” Mazars say, providing in a sentence the reasons for the costly over-runs.
As Inside Croydon revealed exclusively last month, the council appointed its in-house house-builder to oversee the works without ever seeking a competitive tender.
In detail, the Mazars report states, “The report to Cabinet on 20 June 2016 (key decision 14/16/CAB) details that, ‘Brick by Brick would complete the £30m package of improvement works to Fairfield Halls under licence.’
“Examination of the signed copy of the ‘Licence for access to carry out works in respect of property at Fairfield, College Green’, confirmed that this licence, dated 1 August 2016, was formally agreed between the Council and BxB. However, while examination of the licence established that Schedule 2 included the ‘Outline Brief and Scope for Licence’, there were no specific contract conditions relating to quality or deadline for delivery.
“Where the Brick by Brick is under licence to complete the works, rather than the works being awarded through a competitive process and a formal contract being in place, the council is limited in being able to specify the quantity and timescales for this work and therefore will have limited recourse where these renovations are not completed to the council’s time and quality expectations.”
And Mazars recommends “… that a full review of the works actually undertaken and any variation from those included within the original summary of works is conducted”, therefore echoing the widely-held concerns that when Brick by Brick handed over the site before the re-opening, the works were still unfinished and incomplete.
The latest Mazars report also places special focus on Mustafa, the £176,000 per year council executive who Croydon’s now discredited former CEO, Jo “Negreedy” Negrini, had placed in overall charge of the Fairfield Halls as well as the borough’s house-building programme.
Mustafa chaired the Fairfield board from May 2017, and so was privy to discussions over the refurbishment with Brick by Brick. In January 2019, she was appointed to the board of Brick by Brick, too. The conflict of interest was expressed – that is, notified at meetings – yet nonetheless Mustafa remained on the Brick by Brick board until September 2020 – only standing down, it now seems, because of the work being done last year by Mazars.
In their assessment of risk to the council, Mazars marks the conflict of interest as a top priority, as they offer a report of “No assurance”.
Such a “No assurance” report is defined as, “Controls are non-existent or weak and/or there are high levels of non-compliance, leaving the system open to the high risk of error or abuse which could result in financial loss and/or reputational damage”.
As well as Mustafa’s conflict of interest, Mazars found important sale contracts for property neighbouring the Halls, at College Green, still unfinished more than four years after the council and Brick by Brick began negotiating the redevelopment of the area.
This report, of itself, should be shocking enough.
Yet more than three years earlier, in June 2017, before any works had even begun on the benighted Fairfield Halls scheme, Mazars had issued an amber warning over unsatisfactory aspects of the contractual preparations for the project.
The auditors had found a document, the Project Initiation Document, or PID, which they said “was still a first draft, was out of date and had not been signed”.
This 2017 report was issued to Mustafa and Richard Simpson, the council’s then director of finance, as well as five others council directors and senior managers. The report also went before the General Purposes and Audit Committee.
All to little or no effect, with the end result that Croydon now has a part-refurbished arts centre which, for the first time in its 59-year history, has no purpose-built arts galleryand no working stage door lift, and the council has no money to put the short-comings of the works right.
But Croydon is London’s “Borough of Culture” in 2023.
- Click here for the Nov 2020 Mazars audit into Fairfield Halls delivery
- Click here for the Jun 2017 Mazars audit on Fairfield Halls delivery
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