£70m fiasco: the auditors have spent nearly a year trying to trace where all the money has been spent on the Fairfield Halls refurbishment
CROYDON IN CRISIS: The £70m ‘Fairfield fiasco’ has provoked serious concerns with auditors over the potential misuse of public money, with bungling developers Brick by Brick under scrutiny.
EXCLUSIVE
By STEVEN DOWNES
External auditors are to issue a Report In The Public Interest to Croydon Council within weeks.
It will be the second RIPI to rock the cash-strapped council in barely 15 months.
This latest stern legal warning over the council’s mishandling of public funds has been raised because of the £70million spent (so far) on the refurbishment of the Fairfield Halls arts complex, what was supposed to be a two-year project that in the end took more than three years and was left incomplete and unfinished despite going £40million over budget.
It follows nearly a year’s painstaking, forensic accountancy work conducted by auditors Grant Thornton in an exercise which was prompted by their previous RIPI issued in October 2020 when they found “collective corporate blindness” among the borough’s senior employees and political leaders.
Early visitors to the Halls when it was reopened in September 2019 related how disappointed they were in the poor standard of work and the absence of some of the significant pieces of modernisation which had been promised as part of the refurb.
‘Corporate blindness’: Tony Newman (left) the council leader, failed to act on over-spends at the Fairfield Halls, before he got Sadiq Khan to perform the reopening
The project was overseen by Brick by Brick, the council’s loss-making house-builders.
Grant Thornton were supposed to have published their “urgent” Value for Money audit of the Fairfield Halls refurbishment by mid-February this year.
But what the auditors discovered in the early investigation of the books prompted them to delve ever deeper into the morass of mismanagement on the project, much of which had been evident since the building work began in 2017.
Lawyers have been brought in to pore over the auditors’ work, and the seriousness of Grant Thornton’s findings – possibly including the misuse of millions of pounds of public funds – have seen what was supposedly a value for money review transformed into a full-scale Report In The Public Interest. Grant Thornton have produced at least two drafts of their report, which have in turn been circulated to those mentioned or involved, which is usually the final stage before publication.
Under Schedule 7 of the Local Audit and Accountability Act 2014, a Report In The Public Interest is what auditors are expected to issue in the event of serious concerns regarding governance and finances discovered while overseeing local government.
Between 2016 and 2020, not a single RIPI needed to be issued across England and Wales. Since 2020, three have been published: at Northampton County Council, Nottingham City Council and to Croydon Council.
To have a second RIPI slapped on the council in such a short space of time, as has happened in Croydon, is unprecedented.
When Grant Thornton were working on their previous RIPI in Croydon, their findings precipitated the abrupt departures from Fisher’s Folly of Jo “Negreedy” Negrini (accompanied by a £440,000 “golden handshake” settlement), as well as council leader Tony Newman and cabinet member for finance, Simon Hall.
Ignored warnings: Jo ‘Negreedy’ Negrini jumped ship before the auditors’ first RIPI
The report when it landed was broadly critical of the council’s governance and poor levels of scrutiny generally, after the auditors had had their warnings over the council’s precarious finances ignored by Negrini since 2017.
Grant Thornton observed that Croydon’s oversight of its various companies showed “insufficient rigour and control”. The council’s biggest exposure in business was the £200million of lending to Brick by Brick for its house-building programme.
Grant Thornton’s criticisms of the council’s scrutiny committee and cabinet, if repeated in the forthcoming Fairfield Halls RIPI, ought to be terminal news for the political careers of the likes of Sean Fitzsimons, the unrepentant chair of scrutiny, Ollie “Shit Show” Lewis, the officer-led cabinet member for arts, and Hamida Ali, Newman’s permanently apologising replacement as council leader.
Most of the senior council employees involved with the Fairfield fiasco – such as six-figure-salaried execs Shifa Mustafa and Paula Murray – have since left the council.
Colm Lacey, the former council director and Negrini acolyte who was placed in charge of Brick by Brick, is understood to be serving out his notice period at the company.
At a council cabinet meeting this autumn, Katherine Kerswell, the current council CEO, had suggested that the Grant Thornton “review” was being upgraded to a RIPI.
In charge: Colm Lacey (centre) was BxB’s CEO throughout the Fairfield fiasco
Last night, at a meeting of the General Purposes and Audit Committee, Richard Ennis, the council’s latest finance director, told councillors that the auditors’ draft report “is out with affected parties on the potential that they will issue a Report In The Public Interest… a second Report In The Public Interest on the council, following the main Report In The Public Interest. This would be about the Fairfield Halls.
“So it’s gone out for consultation with affected individuals. Those individuals have responded or not responded… they are considering all those responses, they are taking it through their internal legal teams.”
That this matter might yet lead to any criminal or fraud investigation is implicit in that the legal opinions of other public service bodies has also been sought.
Ennis told the meeting that he expected that the report will be published “sometime in December, at what point, we don’t know”.
And before anyone jumps in to claim that none of this might have happened under the #ABitLessShit system of a directly-elected mayor, which Croydon is to introduce next May, then forget it. Grant Thornton says that the system is not what would change things.
In a report published by the global accountancy firm in March this year, they actually state that “it’s less about the system of governance and more about how it operates, who operates it and how willing they are to accept scrutiny and challenge”.
And they even helpfully provide a page with the seven Nolan Principles for conduct in public life.
Copies of the Grant Thornton report, and the Nolan Principles, can be emailed to colm.lacey@wearebrickbybrick.com
Read more: Mystery of the ‘lost’ £600,000 expert report into Fairfield Halls
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
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This is absolutely of no surprise.
How anyone from Newman’s Cabinet or with links to Negreedy can think about standing for Mayor of Croydon is utterly disgraceful and the electorate should keep that in mind when final candidates are announced.
From the start this was a cock up, from ignoring professional calls to phase the works which resulted in closing down the halls and ridding the borough of the previous trust, to speedily awarding a contract to swimming pool operators with no interest in the borough; from kicking out the experienced team at Mott McDonald, to bringing in Captain Clueless and the team at Balls up X Balls up, this has been an utter disgrace that didn’t need to happen.
Croydon Council, do the right thing – close the venue down, get in a local community trust of professionals to re-open and operate it and at least attempt to salvage the reputation of our once renowned Halls.
Tribute bands, martial art events and a pantomime with a cast that doesn’t really reflect the diverseness of the borough – is that what £70+ million affords?
Jo Negreedy jumped ship but everyone had serious doubts about her long before that. Her lack of understanding about local government, her inability to judge someone’s ability to do a job, her lack of accountability and unwillingness to engage with the great unwashed.
I see a similar arrogance and disengagement with Katherine Kerswell, the council’s new CEO – that’s worrying.
I think the new CEO Kerswell has a fairly successful track record, with turning round Notts council and others, and directing civil service reform in central govt, and long public sector reform interest. that’s quite a big difference in experience. see gov.uk / search engines for list of her experience
I agree the whole thing is disgraceful and must be challenged. The result of all this mismanagement of OUR money is trying to close libraries, nor more free swimming for seniors and under16s (was this ever agreed by the council? ) closure of community centres, no money for this, no money for that, neglect of parks, potholes not fixed, the list just goes on and on. I say vote Green from now on!
Take a look at Brighton first.