CROYDON IN CRISIS: Twelve months after Grant Thornton was asked to conduct an audit of the botched and budget-busting refurbishment of the Fairfield Halls, their report has yet to be published. The delay seems likely to be because the auditors have discovered evidence of unlawful conduct.
EXCLUSIVE By STEVEN DOWNES
The external auditors whose dynamite Report In The Public Interest in October 2020 forced council leader Tony Newman and his key aides out of office have yet to publish the findings of a further audit, this time into the council’s multi-million-pound bungled refurbishment of the Fairfield Halls.
But official documents obtained by Inside Croydon strongly suggest that the delays have been caused by the shocking findings of the auditors, including the possibility that the deals between the council and house-builders Brick by Brick were unlawful.
It is 12 months this week since Katherine Kerswell, the council chief exec, commissioned this further piece of work from Grant Thornton, who at the time suggested that their report could be ready in just six weeks.
And although Kerswell has more recently admitted that she has received draft versions of the report from Grant Thornton director Sarah Ironmonger – the lead author on Croydon’s first RIPI – the Fairfield Halls report has still yet to be made public.
Sources in Fisher’s Folly suggest that Richard Ennis, the council’s new finance director, received a mild dressing-down from Kerswell after he let slip to a council meeting last month that Grant Thornton’s “value for money review” into the Fairfield Halls fiasco has been upgraded to a full-on weapons-grade Report In The Public Interest.
Since the regulations were changed in 2015, only five other local authorities in the country have been the subject of Reports in the Public Interest, so for Croydon to get a second one in little more than a year will, rightly, be an unwanted “achievement” by our clusterfuck oof a council.
Other pieces of information which have seeped out from Fisher’s Folly suggest that Grant Thornton have been spending rather a lot of time with lawyers poring over their findings, and that there is considerable concern both with the auditors and council chiefs that with this report, unlike the previous RIPI, there are no loopholes left which might allow those at the centre of any findings to squirm their way out of full accountabilityfor their actions.
The document obtained by Inside Croydon confirm that right from the beginning of the review, with the auditors’ suspicions having been raised from their previous work on the accounts of both the council and its wholly-owned housing developers, Grant Thornton were looking for the possibility of unlawful activity.
According to a source, “Sarah Ironmonger made it very clear when speaking to us that Grant Thornton suspected that there had been unlawful use of public money.”
At the centre of the auditors’ attention is how a £30million budget, two-year project could have ended up costing at least £70million, take more than three years, and yet still be incomplete and unfinished.
And much of that appears to stem from the decision to hand the task for running the project to rookie in-house house-builders, Brick by Brick.
All of the key decisions were made when Newman was council leader, Simon Hall was the cabinet member for finance and Alison Butler was the council deputy leader and cabinet member for housing, with self-acclaimed “regeneration practitioner” Jo Negrini as the council’s “executive director Place” and, from 2016, its CEO.
In September 2014, the council cabinet approved Negrini’s brainchild of a “Cultural Quarter” (at one point under Negrini, Croydon had more “quarters” than a Manhattan phone box), to include the regeneration of Fairfield Halls.
A year later the cabinet rubber-stamped a capital budget of £33.75million for the Halls’ refurbishment.
In October 2015, authority was delegated to council officials to enter into commercial agreements to bring together housing development around College Green and the Fairfield Halls project.
Eight months later, Newman’s numpties in the cabinet duly did as they were told and approved the proposal to hand all of this over to Brick by Brick, the council’s wholly-owned housing company that had yet to build a single house, never mind oversee a sensitive restoration project on a mid-century arts venue.
As Inside Croydon investigations last year uncovered, Brick by Brick was awarded the licence to carry out the Fairfield Halls refurbishment project without the job ever being put out to commercial tender.
The Halls closed in July 2016 for the works to begin, with an original completion date of June 2018. Brick by Brick did not commission the main works contractor until May 2017, with works commencing in September 2017.
In the Grant Thornton document, under the heading “Potential risks identified”, it says, “The articles of association for Brick by Brick Croydon Ltd outline that it is for housing development, so in undertaking the refurbishment of Fairfield Halls, there is a potential risk that it may have been operating outside of its permitted scope of activity.”
Such activity could be deemed to be unlawful.
The document continues, “It is alleged that the work delivered was of poor quality and in some instances not fit for purpose. There is a potential risk that work undertaken was not at the standards of competency and experience that would be expected for a large-scale public procurement of this kind.” It seems most unlikely that Grant Thornton will not be able to prove these contentions.
But the real humdinger is this: “It is alleged that the council does not have a contract with Brick by Brick Croydon Ltd relating specifically to the Fairfield Halls project but a licence.”
As Inside Croydon readers will already be aware, Mazars, the council’s other auditors, confirmed more than a year ago that there was no contract with Brick by Brick for the multi-million-pound refurb. Grant Thornton says, “There is a potential risk that procurement regulations may not have been fully met.” Again, if proven, this would be unlawful conduct.
A further “potential risk” identified by the auditors in a real No Shit Sherlock moment is that the refurbishment project went over-budget…
This, Grant Thornton says, would show that the council “has not implemented effective governance arrangements over the lifetime of the project to control costs”, which looks like another slam-dunk.
Tonight, a Katharine Street source said, “There’s no doubt that the council has been dragging its feet over the publication of the final report. We all know that they have had lawyers climbing all over this thing for months to make it legally watertight.
“But there has to come a time when Kerswell has to deliver on her promise for transparency over what we all know now was a £70million fiasco.”
Croydon is London’s Borough of Culture in 2023…
- Read the council’s original report from 2014 proposing the ‘Cultural Quarter’
- Read the Nov 2020 audit of Fairfield Halls delivery from Mazars
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
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