CROYDON IN CRISIS: The incompetent chief executive and self-proclaimed ‘founder’ of the council-owned building company which bankrupted the borough has announced his departure – but councillors have been kept in the dark. By STEVEN DOWNES
Colm Lacey is to leave his job as chief executive of Brick by Brick, the council-owned house-builders whose failure to repay a penny of around £200million in loans from the Town Hall or to make any profit in five years was a key factor in Croydon Council going bankrupt.
Also to leave the failed company is Lacey’s deputy CEO, Chloe Phelps.
An announcement appeared on Lacey’s personal LinkedIn profile at around 3pm today, and Brick by Brick’s PR company also fed a positive spin to a handful of tame industry titles prepared, as ever, to regurgitate any old nonsense.
But no announcement of this significant development was made to the council’s staff – some of whose jobs have been under threat because of the financial collapse – nor to the borough’s elected councillors.
In his time in charge, Lacey became renowned for withholding information from council committees and for failing to be in command of his brief: at one scrutiny meeting in 2020, he could not even answer a simple question about how many new homes his company had managed to build by that point.
Having been kicked off the company’s board in November last year, Lacey appears to have given up on trying to save his own skin within Brick by Brick after a cushty “mates’ rates” sale of the company to another developer was scuppered by the government’s improvement panel last month.
How Lacey was not sacked in the immediate aftermath of the council’s financial collapse last November has never been explained to council staff nor the Council Tax-payers, who seem likely to be picking up the tab for Brick by Brick’s failures for many years to come. Auditors, independent consultants and two council finance directors have all confirmed that Brick by Brick’s failure to make repayments on loans or pay any profits – the shortfall amounted to around £33million in the 2020-2021 financial year alone – was what crashed the council’s finances.
According to one Katharine Street source, the fear of a hostile backlash to Lacey being able to escape Croydon with a hefty six-figure pay-off meant that the consultants advising the Town Hall leadership suggested they should bide their time and wait for his resignation as chief executive.
As it is, it seems Lacey is being allowed to serve out a three-month notice period, and so will continue to collect his hefty pay packet until the end of the year.
Unusually for a publicly listed company, Brick by Brick failed to state the salaries of its highest-paid employees in their most recent set of accounts. According to figures from the council, Lacey could have been on around £180,000 per year, perhaps more.
Lacey was recruited by his former colleague, Jo “Negreedy” Negrini, as Croydon Council’s director of development in September 2014. While he had been on borough development teams at Lambeth and in Newham, the local authority staffer had never worked in the private sector and had no experience of running a major construction business.
Brick by Brick was registered at Companies House in 2015 and Lacey – who continues to claim he was its “founder” – was installed as the house-builders’ CEO in January 2016. It was in late 2018 that he was formally transferred from being a member of council staff to being on the payroll at the already struggling housing company.
According to his mates in the trade press, “Under Lacey, the company has looked to provide housing across the borough on small infill plots and became known as an architectural patron.” Which is nice.
What Brick by Brick never became known for was building the high volume of new homes that they were supposed to deliver, nor for ever managing to make a profit under Lacey’s “leadership”.
According to the company’s own figures, after more than six years, Brick by Brick will have completed 460 homes across 18 sites by this autumn. A further 311 homes are in construction.
But showing the company’s usual “challenged” approach to numbers, and veracity, the BxB website today claimed that this meant that Lacey had grown “… the business from its inception to deliver over 750 homes”.
It was Brick by Brick that oversaw the “fiasco” of the Fairfield Halls refurbishment, which was delivered more than a year late and has cost at least £70million, after Lacey and his company had been given a budget of just £30million.
A deal for a Manchester-based developer, Urban Splash, to buy up what remains of Brick by Brick and its as yet unfinished sites – potentially including roles for the likes of Lacey and Phelps – collapsed last month when government-appointed commissioners ruled that having only a single bidder for the company and providing discounts and sweeteners on the deal worth at least £100million did not represent best-value for Croydon tax-payers.
The council is now winding down Brick by Brick on completion of the sites currently under construction, with Wates called in to oversee the process. Because, clearly, Lacey and Brick by Brick cannot be relied on to deliver anything…
The wind-down was supposed to have been concluded by October this year, though some reports today suggest that this process could yet drag on until 2023.
“With the council opting for a managed wind-down of company activities, it feels appropriate for me to step down after helping the company transition into its final phase,” Lacey said.
“I’d like to thank my talented and resilient team who have worked with me over the years.
“I have no doubt that many will go on to become future leaders across the built environment. It has also been a pleasure to work with such a wide array of exciting young architecture practices, as well as our other dedicated partners, suppliers, contractors and consultants.”
Read more: Council to pick up £69.2m costs of failed Fairfield Halls refurb
Read more: Conflicts of interest, incomplete contracts, unlawful payments – how the Fairfield Halls refurbishment cost Croydon £50m-plus
Read more: Making a Splash: big bailouts behind Brick by Brick’s buyers
Read more: ‘An accountant could have foreseen this more than a year ago’
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