CROYDON IN CRISIS: Political editor WALTER CRONXITE on the growing row over council secrecy over Brick by Brick and the fire sale of property assets
The secrecy over the consequences of the council’s plan to wind-down failed housing developer Brick by Brick, at a cost of at least £100million to the borough’s Council Tax-payers, has prompted a senior opposition councillor to question the sincerity of Town Hall leader Hamida Ali’s promises to reform the local authority.
As revealed by Inside Croydon last week, the proposals for the future of Brick by Brick and losses of at least £100million are to be discussed at a (virtual) meeting of the council’s scrutiny committee tomorrow night. But vital financial details have been withheld from the majority of the borough’s councillors and all its residents, only available to a handful of council figures in what is called the Part B report.
Today, denied access to the Part B report, Jason Cummings, the deputy leader of the opposition Conservative group at the Town Hall, asked, “How ‘open and transparent is this council?”
Cummings referred to promises made by Hamida Ali when she took over as council leader in October, soon after her predecessor Tony Newman quit after leading the borough to the brink of bankruptcy. “When Councillor Ali replaced the now-discredited Councillor Newman as leader of Croydon Council, one of the first things she did was to pledge ‘new ways of working’,” Cummings said.
“One of these was: ‘We will aim to become a much more transparent, open and honest council. We will involve residents in our decision making’.
“This week, her statement is ringing particularly hollow,” Cummings said.
All administrations of all councils have used confidential Part B reports to try to keep parts of their business out of the glare of public scrutiny. “Commercial confidentiality” is the usual excuse, which overlooks the fact that vast sums of public money are often involved.
When Cummings and the Tories had control of the Town Hall, up to 2014, they kept all the financial wheeling and dealing over the costs of Bernard Wetherill House, the council office building, top secret and denied access to the figures to Labour councillors.
The building became known as Fisher’s Folly, named after the former Conservative leader of the council, Mike Fisher, when it eventually emerged that in their secret deal with builder John Laing under their own disastrous property speculation scheme, called CCURV, Croydon paid £150million for the shiny new office block – about three times as much as similar office developments in south London at that time.
It meant that Fisher’s Folly ended up costing more to build per square foot of office space than The Shard.
Understandably frustrated and annoyed at such a wanton waste of public money, in 2014, when campaigning in that year’s local elections, Croydon Labour’s manifesto, approved by Newman, promised “the most open and transparent council in the history of Croydon”.
Like so many others, it was a promise soon discarded and forgotten.
And now, within a few weeks of taking the Town Hall top job, Hamida Ali appears set to break her own promise of being “much more transparent, open and honest”.
Cummings said, “Councillor Ali and her cabinet are going to make a decision about selling assets, but they won’t tell you what they are. They are going to make a decision about the future of a company which owes you more than £200million and they won’t tell you what impact it will have.
“So, how ‘involved’ do you feel?”
And Cummings added, “The future of Brick by Brick has been subject to huge speculation as to the part it has played in bankrupting our council.
“Brick by Brick has more than £200million of loans it has received from Croydon Council, most of which Councillor Stuart King confirmed at the last full council, are still in default.
“The Part A papers reveal that Brick by Brick will continue to trade for a while and finish building out some of its sites. This is apparently the ‘best’ option.
“All the figures and impact of that, though, are in the Part B papers. A decision is being made but you, the very people who have to bear the consequences of that decision, are not being told what its impact will be. They know. They don’t want you to know.”
Cummings is also concerned about the fire sale of other council assets – thought to include property such as the Croydon Park Hotel, the Colonnades on Purley Way, one or two of the borough’s dumps, up to five library buildings, perhaps even Fisher’s Folly itself, and other land and buildings, some of which had been earmarked for development by blundering Brick by Brick.
Not unreasonably, Cummings feels that before making any decision, councillors really ought to have some idea of which properties are to be flogged off.
“We have known for some time that this list exists,” Cummings said.
“Councillors have asked multiple times in council meetings for the list to be made public. It hasn’t been.
“Now the formal process of selling those assets is actually starting and still it remains secret.”
Inside Croydon has repeatedly requested an interview with Hamida Ali since she became leader of the council. She has never replied.
So instead, here’s an audio recording of her being interviewed on BBC Radio London about the council’s financial collapse:
Read more: Brick by Brick has paid nothing to council
Read more: ‘An accountant could have foreseen this more than a year ago’
Read more: Officials to investigate possible wrong-doing at council
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Croydon council by now must stink like a rotten corpse heaped upon by more lies and mendacity
The sale of BrickxBrick is not hidden away because it has already started. I know of two property equity/development companies who have been approached by agents working for the council. I haven’t more detail than this but one comment from one of the speculating companies was “ ffs, they’re giving it away.”
Say no more.
Given that Brick by Brick was funded by public tax payers money how can it be ‘sold off’ and how can they keep any of this secret? All of this needs to be dragged into the light and the fraud squad brought in.
Furthermore the people involved in losing all this money need to be banned for public office.
Alicdoodle, you are of course 100% correct, but the remaining leadership members/ex-leadership members and directors/ex-directors and ex-chief exec all seem to be above the law somehow. There is a lot of evidence there, but they seem to be getting away scot free (no pun intended to a certain Scott). Just take the absolute disaster of the Croydon Park Hotel purchase, why oh why would you pay millions over the original asking price for it? In fact, why would a London Borough Council even want to own hotels etc??
“There is a lot of evidence there”? Really? Where is it?
There’s plenty of evidence of crass incompetence, lack of proper controls and bad decisions. But fraud? None that we’ve seen (yet).
I don’t think it’s clear why the council bougth the hotel or the purley way shopping centre as they did not ask the people for permission. Local government should be up for reelection every two years if they get to have this much power – the people need to be able to get rid of people like Scott, Butler and the Cabal who did all of this. As for Fraud, it’s close. Where has all the money gone? Furthermore, there’s the issue around BXB having built inappropriate developments against the objections of local people. And selling them and where has that money gone?
You wrote: “I don’t think it’s clear why the council bougth the hotel or the purley way shopping centre as they did not ask the people for permission.”
It has always been clear. The commercial properties were bought in an attempt to make a profit which could be used to pay for front-line services. The question was over whether the right price was paid for the purchases (certainly, Croydon Park Hotel was being offered for sale for about half of what the council bought it for), and whether Newman & Co carried out the proper processes in authorising the deals (they didn’t).
But they didn’t need to seek permission: they were elected, remember? That’s how local government works.
You said: “Local government should be up for reelection every two years.”
Twice the cost. Twice the time of local politicians spending electioneering, rather than working in and for the communities that they profess to serve. Not really practical.
You wrote: “As for Fraud, it’s close.”
So it’s not fraud then.
You wrote: “Furthermore, there’s the issue around BXB… selling them and where has that money gone?”
You’ve missed one of the fundamental shortcomings of Brick by Brick: they have been slow to complete their builds, incurring additional costs, and then they have failed to sell the properties that they have built speedily. So they’ve not been covering their costs, and not been making any profits. A badly-run company has become a money pit.
Steven, i appreciate and understand that you cannot accuse anyone of fraud on your site unless we have undeniable proof that fraudulent activity has taken place.
However, I am with alicdoodle in that i suspect something suspicious has taken place with these dealings. Let’s just take the Croydon Park Hotel issue for instance. If i find a nice house for sale at my local estate agents for £535K asking price, i would expect to pay £535k, or hopefully get a slightly lower offer accepted for it. I would not tell my mortgage lender that rather than pay £535k, i want to pay £635k for it instead. My mortgage lender would be like “what the fuck would you want to do that for?”
The estate agent on the other hand would be thinking “well that would earn me extra commission, so would say “yes, good idea, go for it at £635k”.
Something just does not add up here, as i am aware of what the original asking price was for the Hotel, the figure is in the public domain. Why oh why would the council go in and pay millions above the asking price, it just does not make sense at all, whatever way you look at it. I do hope Ms Kerswell is getting the right people to look at this behind the scenes, and the right people should ultimately be the police fraud department This is the only way we will know if the Council have been involved in fraudulent activity.
I don’t have to be “careful”. We publish material when we have good grounds for doing so. But I am aware that wild accusations have been bandied about with not a shred of evidence – and that’s something which does not help the calm, cool collection of real hard evidence with which to nail the bastards.
As one source told me today, “It will be said that there has been significant incompetence, mismanagement, failures of diligence, and poor governance. But as to unlawfulness, there is mere suspicion. The possibility that the suspicion is justified remains, as is often the case with suspicion, but unlawfulness has not been evidenced.”
So we will just keep on looking for evidence.