CRISIS SPECIAL: The council’s most senior legal official wants to check the £70m Fairfield fiasco for fraud, but the borough’s Labour councillors don’t want to call in the police, yet their leader says she has already reported it to the borough’s top cop. By STEVEN DOWNES
Where’s the money gone?: Inspector Knacker of the Yard is about to be asked to investigate the Fairfield Halls fiasco
The mishandling of £67.5million of public money for the refurbishment of the Fairfield Halls arts centre is to be referred to the Metropolitan Police for investigation.
Just who will be doing the referring, to whom, when and how remains uncertain, after last night’s Extraordinary Council Meeting ended in uproar as the borough’s politicians entered into an unseemly squabble as both sides, red and blue, tried to claim the credit for doing the right thing – albeit about five years too late.
The meeting was called, as required by law, to respond to the long-awaited auditors’ Report In The Public Interest that was published last week.
The RIPI had made plain the serious concerns of the auditors, Grant Thornton.
“In our view, it is likely that the licence [the agreement under which council-owned developer Brick by Brick was to carry out the sensitive refurb] did not reflect the underlying reality of the arrangements,” the report says.
Another critical report: Croydon’s second RIPI in the space of 15 months
And the auditors add, “It is our view that the licence was (at least in part) intended to circumvent procurement law and competitive tendering.”
That is the language used by professionally cautious accountants to say there is real potential that a multi-million-pound fraud has taken place.
The call by many to get Inspector Knacker’s fraud squad to probe into the finances of the late-running and never properly completed Fairfield refurb project follows the 14-month investigation by Grant Thornton auditor Sarah Ironmonger and her team.
Those identified in the RIPI include former chief exec Jo Negrini, discredited ex-council leader Tony Newman and Richard Simpson, the finance director who was involved in drafting the dodgy licensing arrangement that put Brick by Brick in charge without the legally required competitive tendering.
All but one of those mentioned by Grant Thornton have since left their jobs or resigned as councillors.
Ironmonger signalled last night that her work was made more difficult because of the council’s apparent failure to keep full records, documents and minutes. The possibility that such corporate reticence has been deliberate cannot be excluded.
Unconvincing: Hamida Ali has been a cabinet member since 2016
The auditors’ report is clearly very troubling to the Labour group that has run the Town Hall since 2014 because so many of the current leading figures, including leader Hamida Ali, were members of the council cabinet under Newman at the time that the Fairfield fiasco was unravelling. Yet they failed to do anything about it.
As Ironmonger laid out the evidence that Grant Thornton had accumulated over the past year or more, her disdain for the manner the project had been conceived and mismanaged was plain.
She, after all, had bothered to read the 2015 report from consultants Mott MacDonald which had told the council that the works required on the Fairfield Halls would cost… £70million.
Ironmonger, too, had pored over the minutes of a cabinet meeting in June 2016 which had outlined the plan to put newly-formed in-house house-builders Brick by Brick in charge of a sensitive refurb project for which they were completely unqualified.
“The risks existed,” Ironmonger told the meeting last night. “They were not set out.
“We can’t find any evidence of how those risks were considered.”
Newman and his cabinet member for finance, Simon Hall, together with “regeneration practitioner” Negrini, believed that they could pay for the Fairfield Halls’ refurb by handing over land on the adjacent College Green for development into hundreds of flats, while providing Brick by Brick with a loan to see them through the costs of the scheme.
Ironmonger told last night’s meeting, stony-faced, that none of the agreements to transfer the College Green land or the loan to Brick by Brick could be found.
Risky business: Sarah Ironmonger, left, of Grant Thornton gives the council some home truths
“We are unsure of the legality,” she said.
“This could be viewed as a breach of procurement law.” Which, it is worth noting at this point, would be illegal.
Ironmonger highlighted how, in August 2016, the licence for the works was issued to Brick by Brick without any competitive tender process, but that legal advice regarding the requirements for public procurement was not sought until November 2016. That legal advice, Ironmonger told the meeting, included the suggestion that the arrangement between the council and Brick by Brick included “significant risk” of a breach of state aid laws. But the council never acted on that advice.
Ironmonger told the meeting that there were several opportunities for the council’s elected representatives, especially those in Newman’s cabinet, to raise the issues over the misdirected refurb.
But she highlighted the lack of any real urgency within the council: the Fairfield Halls closed in June 2016 for what was supposed to be a two-year project; building contractors Vinci produced their scope for the works in October 2018 – four months after the whole thing was supposed to have been completed.
It was in October 2018 that the cabinet member for arts and shit, Oliver Lewis, reported to a council meeting that the expected cost of the refurb had now reached £42million – £12million over the 2016-agreed budget.
As Ironmonger pointed out, by that stage, the College Green development which was supposed to be paying for all the works had all but collapsed, after Croydon College pulled out and sold their annex building to another buyer.
Artful dodger: Ollie Lewis has been cabinet member for culture since 2018
According to Ironmonger, that important detail of the multi-million-pound property transaction was kept secret from councillors by senior council officials and Brick by Brick for at least 10 months.
Last night, Ironmonger took questions from councillors, with many of those from Labour councillors apparently attempts to cover their own arses for their abject part in the fiasco while others, such those from Newman loyalists “Thirsty” Chris Clark, Stooge Collins and Joy Prince, appeared to be just patsy questions intended to waste time as much time as possible and so avoid other, more revealing questions potentially being put to the auditor.
In the hot seat as chair of the meeting was the deputy mayor Felicity Flynn, one of the handful of Labour councillors who have been deselected by their party ahead of May’s local elections. Here, Flynn may have extracted some revenge over her soon-to-be ex-colleagues, as she let the questions to Grant Thornton run, and run, and run.
No one expected, for instance, for the session to get to the 20th questioner, Labour pariah Andrew Pelling.
Chief whips have control over who can, and who can’t, get to ask questions in the Town Hall Chamber, and if they want to marginalise a councillor, they can stick them at the bottom of the list to ask questions. There was no way, in what was supposed to be an hour-long session, they should ever have got to Question No20.
Having a mayor: Felicity Flynn let questions to Grant Thornton run, and run, and run
Pelling has already this week called for his leader, Hamida Ali, to resign over her part in the Fairfield scandal. As an enthusiastic member of Newman’s cabinets, Ali is damned if she knew, and damned if she didn’t know because she never bothered asking.
Last night, Pelling asked Ironmonger: “What evidence was found of consistent questioning by the cabinet about the financial performance of the Fairfield project?”
Ironmonger answered that, after a cabinet paper in 2016, there was none. Meetings went unminuted, any such questioning, if it ever happened, was not recorded.
Indeed, page 5 of the RIPI states categorically, “We have not been able to identify explicit formal reporting to the cabinet of the project additional spend. Allowing the project costs to more than double from the original budget without explicit formal reporting to the cabinet represents a fundamental failing by the council.”
The use of “explicit formal reporting” suggests that the council staff have told Grant Thornton that they did warn Newman, Hall, Alison Butler and others in the council cabinet. The councillors, meanwhile, are saying that they didn’t.
The F word: John Jones, the monitoring officer, sees a need to investigate for fraud
As one Katharine Street source said today, “Hence the supposition that there must be two stories being told. Which we know there are.”
Elsewhere in the report, it doesn’t take much reading between the lines to work out that some of those in charge have not been entirely frank with the auditors.
The RIPI identifies Butler, Hall and Newman saying that they “were either not briefed by officers and should have requested briefings on the project given what they appeared to know or did not take effective action in response to concerns raised by the officers”. Those are our italics, for emphasis.
This section of the meeting continued for so long that Labour ran out of questioners for Ironmonger. Their councillors were left to squirm in their seats as Flynn allowed Tory questioner after Tory questioner.
‘The shame piled upon our town’
Eventually, that uncomfortable section of the meeting came to an end.
An hour and a half into the meeting, the best was still to come.
Flynn introduced John Jones, the council’s new monitoring officer, the legal official responsible for maintaining standards of conduct, and the law, within the council.
Warning sign: it was 10 months after Croydon College pulled out of their sale to Brick by Brick for the College Green scheme before the matter was reported to councillors
With a slight Welsh lilt to his voice, speaking from the seat from where Jo Negrini had glared down on her councillor minions for so long, Jones hit the meeting with an “F” word shocker.
“I am advising council,” Jones said, “that the content of the external auditors report be reviewed to identify any concerns or areas that deserve further consideration from a fraud perspective in accordance with the Fraud Act.”
That, of itself, should have been game over for Ali and any others who had been on the council cabinet at any time from 2016 onwards.
Instead, “Apologetic Ali” went on to make her own speech, talking about “14 months of intensive work” and “changes in culture”. The RIPI, she said, “describes the council that we were, not what we are”.
Then she chose to “re-state that apology” to the people of Croydon for the omnishambles that the Fairfield Halls project had become while she was a member of the council cabinet. “This couldn’t happen again,” the council leader said, trying to sound reassuring. And failing.
Yet nowhere in Ali’s speech did she mention anything about passing the Report In The Public Interest to the police. It was not until after Lynne Hale (leading the Tory opposition in the absence, due to a family bereavement, of Jason Perry) first raised the spectre of a motion that would bind the council into raising a police report that Ali suddenly remembered that she had done exactly that a week ago.
“I have already written to David Stringer…”, the Borough Commander, “… to make him aware of this report. They make the judgement about investigation of crime thresholds,” Ali said.
Dogged: Robert Ward
Hale spoke gravely of “the shame piled upon our town”.
She said, “There is no doubt public trust has been lost and residents are understandably keen for some proper accountability.
“When millions of pounds of taxpayers money is involved, you simply cannot shrug your shoulders and walk away from this debacle which happened on your watch.”
One councillor who has been doggedly asking questions about the misfiring and costly project, even before he became a councillor, is Robert Ward.
Despite being sidelined, ignored and rebuffed in his enquiries to council staff since he was elected in 2018, Ward, a project manager in his professional career, has never given up in his pursuit of the facts surrounding the Fairfield Halls refurbishment, and the money spent on it.
“The impression has been given here tonight that the council wrote nothing down,” Ward told the meeting once he was given his chance to speak.
“Well, I have trawled through hundreds, even thousands of pages of documents. They tell a very sorry tale. That Croydon Labour have made such a catastrophic mess of this iconic building should cause those who sat in cabinet when all this was going on to hang your heads in shame.”
Ward said that he could see things were not going smoothly just by looking through the fence at the Fairfield building site.
‘Is it really possible to be this incompetent by accident?’
“In February 2019, my Freedom of Information request asking for the full budget cost brought out a cost of ‘circa £41million’ for a project budgeted for £30million. Yet a letter four months earlier was already quoting project costs in excess of £50million.”
In his speech, Ward suggested that there had been a long-running cover-up of the errors and flaws that ran throughout the project, from beginning to end. “The FoI response was solely the construction cost, ignoring the many other costs, hiding the facts…
“An FoI two months later for project change orders was simply ignored… Then misleading information was provided late or not at all. Ask why.
“Ask yourself is it really possible to be this incompetent by accident, to not know this was going catastrophically wrong, yet spend so much effort hiding the facts? Is that really possible?”
Nothing to see here: Stuart King
As the meeting entered its fourth hour, it got increasingly bizarre.
It was now two hours since the council’s most senior legal figure had said he would order a review of the RIPI for possible fraud.
The ruling Labour group, whose leader had told the meeting earlier that she had passed the report to the police, now took great exception to the Tories putting forward a motion asking that the RIPI be passed to… err… the police.
Stuart King, Ali’s deputy leader, seemed particularly upset. He said that there was “Nothing! Nothing!” in the RIPI that required a police investigation. The Tory motion seeking council agreement to report it to the police was “not a proper way to take serious and significant decisions”.
Callton Young, another who was first appointed to the council cabinet by Tony Newman, accused the Tories of “playing politics”. Imagine!
He sought to make the distinction between the auditors’ repeated use of “unlawful”, and anything illegal, which would make it a police matter. This despite his own leader having told the meeting earlier in the evening that it is a matter for the police to “make the judgement about investigation of crime thresholds”.
“Abuse of process!” another Labour councillor shouted out.
Sean Fitzsimons, the chair of a scrutiny committee that had never managed to identify any problems with the Fairfield Halls project between 2016 and 2020, now told the Tories, “To put up or shut up.”
The Tory motion was put to a vote, and Labour’s majority won, 30-20. But they lost the argument long ago.
The Croydon Conservatives issued a statement today, saying that they “will not be leaving the matter there”. Residents, they say, “want to see a full, thorough investigation into this Labour council’s unlawful actions.
“Since the council has not formally sent the report to the police, we will do so ourselves.
“It is time that all those involved were held to account in the proper way.”
The local elections are on May 5. Croydon is London’s Borough of Culture 2023.
Read more: Conflicts of interest, incomplete contracts, unlawful payments
Read more: £30m Fairfield Halls project never went to competitive tender
Read more: Brick by Brick and the 18 documents officers want kept secret
Read more: Kakistocracy: Butler forced into £6m bail-out of Brick by Brick
Read more: A level of ineptitude which would be tolerated nowhere else
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It’s time there was a criminal investigation into the actions of the Council leaders. And the planning department while they are at it. Then we might see the ‘cultural change’ Ali and Kerswell keep talking about.
I thought Clive Fraser was the “Thirsty” one, not Chris Clark ?!
They are both “thirsty”. Very
This is appalling but what do we expect. Having worked in procurement in the construction industry (private sector) for nearly 40 yrs I am disgusted and simple safeguards and regular oversight by experience personal could have avoided the distress the Council and all residents of the Borough now face
Is there a play in this? Perhaps something can be commissioned for London’s Borough of Culture 2023.
Why is it left to the council to call in the police? The people of Croydon are picking up the tab for this shambles, couldn’t one of them report a suspected fraud to the police for investigation?
More to the point, Kevin, is why have the Metropolitan Police investigated all Croydon’s doubtful affairs long ago, if indeed they have not. Cui bono?
Notwithstanding the Tories’ hypocrisy over their government’s fraud and corruption on an industrial scale, and their pantomime over referring the matter to the police, this was a shameful performance by Labour.
They are stuck in the past. Instead of individual councillors accepting responsibility for their own failings and justifiably criticising the ringleaders of this fiasco, they foolishly stood together on the deck of their sinking ship.
Police action against Newman, Hall and Butler would be fitting.
And Negreedy.
So the nodding donkeys are at it again. Really, you have to feel a little sympathy for them, poor loves. Vote against their party and face deselection. Vote with their conscience, same, or vote for what the tax payers want, ditto. What choice do they have if they want to keep their jobs?
Hamida Ali claims there has been “14 months of intensive work” and refers to “the Council that we were, not what we are”. By voting overwhelmingly not to call in the police (along party lines, 30-20) what has actually changed? These people are deranged! Stuart King claims “there is nothing, nothing in the RIPI that requires a police investigation”. Perhaps he needs to visit Specsavers.
Since no documentation has been found transferring the College Green land, or the loan to Brick by Brick, is this a case of The Secret Shredder coming out to play? And of course there is a play in here – “The case of the Secret Shredder”.
Perhaps Inside Croydon could conduct one of its straw polls to determine whether we, the tax payers and voters of Croydon want the police to fully investigate what has been going on with Fairfield Halls and Brick by Brick. Perhaps its time to take decisions out of the hands of the “yes men” of the Council chamber and take back control of our town.
YES! Straw poll please. And we do need to find a way to take back control.
Unfortunately I don’t think this will be achieved by the new Mayor if it’s the current favourite as the connection to the current lot was there in the past!
Independent Andrew is our only hope…
Council money and police time should not be used to create political ammunition
Parties should employ a QC from their own funds
The QC would not, then, be acting independently.
The thing is, council employees and elected representatives have a legal duty to report dodginess to the police as soon as they become aware of it. Kerswell and Ali saw a draft auditors’ report at least 10 months ago, and should, and could, have submitted a report to the police then. Ali, and others, were in the council cabinet throughout 2017 through to 2019, when much of this was becoming apparent. If they really didn’t know, then they were looking the other way.
I’m wondering what will happen if the police do start to investigate. Will they have the power to go through filing cabinets, emails and computers and conduct interviews under caution? That should concentrate a few minds.
That tends to be the process, Kevin.
About time an investigation was started…
Oh, but Kerswell promised staff this would happen in Oct 2020 in her webinar and again in the Nov 2020 and Dec 2020 webinars. I wonder what the delay has been ? Surely not that the promise to investigate was disingenuous ?
Perhaps Sue Gray should help ?
The sooner that all those who hid info and looked the other way during the course of the Fairfield Halls development are charged with Fraud the better!
Perhaps I have not understood.
Surely the Monitoring Officier is duty-bound to refer anything that is irregular or illegal for investigation by the appropriate authorities, and the council for obvious reasons should have no input in that.
You’re right, sort of.
The Monitoring Officer made his announcement and the RIPI will be reviewed for evidence of fraud.
But Thursday’s meeting also had an “action plan” to approve (“We’re werry, werry sowwy, and we pwomise never to be bad again”, that sort of thing). The Tory motion to submit a crime report to the police was an amendment to that plan, which Labour took a disliking to.
“… the cabinet member for arts and shit …” Lol. Classic.
We’re here all week. And next week, too…
Surprised this hasn’t been corrected!
It is correct.
Mr Wright, Please help by saying what has to be corrected as a matter of fact?