CROYDON IN CRISIS: An auditors’ report into the ‘shoddy’ deal that handed the Fairfield Halls refurbishment to loss-making builders Brick by Brick hints at potential fraud and accuses senior officials of large-scale negligence.
EXCLUSIVE by WALTER CRONXITE, Political Editor
Some of Croydon Council’s most senior former employees, including Jo Negrini, the one-time £220,000 per year CEO, were responsible for potentially unlawful conduct in the Town Hall’s arrangements with Brick by Brick over the £70million Fairfield Halls fiasco.
That’s according to a Report In The Public Interest, released this afternoon by the council. In their report, the external auditors, Grant Thornton, hint at a potential large-scale fraud over a licensing arrangement under which the refurb project on the arts complex was coupled to a land and development deal on the adjoining College Green for Brick by Brick.
In typical accountancy speak, the report says, “In our view, it is likely that the licence did not reflect the underlying reality of the arrangements.”
And they add, “It is our view that the licence was (at least in part) intended to circumvent procurement law and competitive tendering.”
A senior Labour figure has today described as “insane” the initial decision by the council to grant the licence to refurbish the Fairfield Halls to an untried and ill-qualified developer, which managed to see a £30million prestige project turned into a £70million “shitshow”.
Or a £67.5million shitshow, according to the figures quoted in the auditors’ report.
The 32-page Report In The Public Interest was finally published today after almost a year’s delay.
At the heart of the problems that have been encountered with the programme of works was that decision, in 2016, by Negrini, backed by the then council leader, Tony Newman, to hand the project to the council’s in-house house-builders, Brick by Brick.
That internal audit prompted Grant Thornton to be commissioned for a value-for-money review into Brick by Brick’s crass mismanagement of the Fairfield Halls refurbishment. What the auditors found quickly persuaded them to deliver a RIPI.
For most involved in local government, whether as very well-paid civic servants or as elected representatives, the shame of being associated with the reproach of just a single RIPI would be career-ending. For Croydon’s cash-strapped, Labour-controlled council, this is the second RIPI in just 15 months.
Significantly, for a report that found compound errors of poor record-keeping and lax scrutiny, the auditors carrying out the RIPI investigation were unable to track down essential legal documents that the council should have on file.
They did manage to discover a lack of proper procurement at the outset, with no schedule of required works, leading to an absence of proper budgeting and cost management.
The RIPI states, “Neither the council nor Brick by Brick have been able to provide a properly executed written conditional sale agreement (which would have been in place had Fairfield Halls been transferred to Brick by Brick in line with the land transfer option) or properly executed loan agreements covering the funds provided by the Council.
“Without properly executed written agreements key elements of the legal advice were not met.
“Further, it is our view that the council’s arrangement was at risk of challenge under procurement law as Brick by Brick was given a detailed specification of works (effectively amounting to a positive obligation to carry out the refurbishment) and the council did not assess whether Brick by Brick was not acting as an independent company, in line with the legal advice.
“In obtaining external legal advice and not fully considering or implementing that advice, it is our view that the council failed to ensure it was acting lawfully. We have not been provided with evidence of senior statutory officers updating cabinet formally on the legal risks emerging, considering how the emerging risks could be effectively mitigated or of the anticipated shortfall in funding… and the foreseeable implications.”
As one trusted Katharine Street source said today, “The council never dared to put the project or its management out to competitive tender, as they are supposed to, because if they did, Brick by Brick could never have been appointed.
“And the disaster that has happened to Croydon and the Fairfield Halls over the past six years is the result.”
As the Grant Thornton auditors state, even once the works finally got underway, reports presented to councillors on the scrutiny committee failed to mention the steepling costs of the refurbishment.
What the auditors have found, after so much careful consideration and costly double-checks by barristers, suggests world-beating levels of incompetence.
In truth, and after such a long wait and so much anticipation, the Fairfield RIPI from Grant Thornton partner Sarah Ironmonger and her team is an anti-climax.
Perhaps there’s more detail, and dirt, in the value-for-money review which council CEO Katherine Kerswell has had for several months, but which remains unpublished.
But there’s been nothing to suggest that Kerswell has invited the Met or the Fraud Squad to investigate the roles played by her predecessor, Negrini, or former exec directors such as Richard Simpson, Jacqueline Harris-Baker or Shifa Mustafa.
It was Ironmonger’s first Croydon RIPI, in October 2020, that accused the borough’s councillors of a “corporate blindness” that led to the council’s financial collapse, which occurred in large part due to Brick by Brick’s disastrous commercial performance and the financial fumblings of Negrini’s regeneration schemes, aided and abetted by Newman and his numpties, such as Simon Hall, Paul Scott and Alison Butler.
With the arts centre refurb linked under the licence agreement to a development on neighbouring College Green, this was always a housing and planning scheme as much as a culture issue. It was Scott who was in charge of planning and his wife Butler who was in charge of housing.
Both remain as Labour councillors today.
None of them, though, get as much as a namecheck in RIPI II – The Fairfield Fiasco.
The closest that the report’s authors come to naming names is to identify that “the statutory officers and chief officers… throughout the time of the refurbishment failed to fulfil their statutory duties”.
The officials are identified as the then chief executive, meaning Negrini, two council finance execs, namely Simpson (now holding a similar position at Sutton Council) and his successor Lisa Taylor (working for Birmingham City Council) and the then monitoring officer, legal official Harris-Baker.
You could sense the sigh of relief in a statement issued this afternoon from the propaganda department in Fisher’s Folly: “All have since left the council.”
Hamida Ali is the current leader of the council who was a council cabinet member throughout most of the time that Negrini and Newman were cobbling together this whole clusterfuck.
On the release of the report, Ali said, “Last year we raised serious concerns with the auditor about the historic management of the Fairfield Halls refurbishment which then led to this report.” In other words, “Nuffink to do with me, guv.”
Admitting that the arrangements for the Halls refurbishment “fell well short” of the standard required, Ali said, “I know that people across Croydon will be rightly angry to hear their money wasn’t safeguarded as it should have been and I want to apologise for that on behalf of the council.”
Ali, whose term as council leader will end on May 5 regardless of the outcome of the elections that day, offered this wan promise: “Fairfield Halls is one of Croydon’s most iconic venues and the council remains committed to supporting the future of this incredible institution.”
Which all means that Council Tax-payers will be left to pick up the tab for Ali’s own and her colleagues’ performance for years to come, making the Fairfield fiasco a live issue in May’s local elections.
Val Shawcross, who is the Labour candidate bidding to be the borough’s first executive Mayor, was today scathing about the mess being left behind by her erstwhile Town Hall colleagues.
Today, speaking to Inside Croydon, Shawcross said of the report, “What has come back is a description of a dramatically shoddy process and its complete lack of any competent supervision, management or control by the council…
“Why the council would insanely want to go out of its way to appoint an inexperienced housing developer without a track record to refurbish an iconic arts venue with specialist requirements is never explored in the report.
“The risks built upwards from this unconventional and ill-advised approach and the mistakes and failure accumulated.”
Read more: Conflicts of interest, incomplete contracts, unlawful payments – how the Fairfield Halls refurbishment cost Croydon £50m-plus
Read more: Council to be rocked by second Report In The Public Interest
Read more: Council forced to declare itself bankrupt
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