EXCLUSIVE: Council says its specialist investigators have yet to find anything around the £67m botched refurbishment of the arts centre which needs to be reported to the police. By STEVEN DOWNES
An investigation to discover if there was any fraud committed when the £30million project to refurbish the Fairfield Halls ended up costing £67million will not be completed until October, at the earliest, and will cost the Council Tax-payers in the bankrupt borough at least £300,000.
That’s according to a long-delayed council response to an official question about the brewing scandal of the Fairfield Halls, where a two-year refurb project took nearly four years yet was never finished nor the full scope of works completed.
As an investigation by Inside Croydon revealed in 2020, the Fairfield works were conducted under the supervision of Brick by Brick, the council-owned housing developer, despite the company having no background or experience in handling complex projects with heritage buildings. Croydon Council, under the leadership of Tony Newman and Alison Butler, never put the contract for managing the project out to competitive tender, as is required of most council-funded projects.
Butler, the former deputy leader of the council and cabinet member for housing, stood down from the council in May, while Newman quit as council leader in October 2020. He was suspended from the Labour Party three months later. Newman remains under “administrative suspension” by the Labour Party.
There has never been a satisfactory explanation for the spiralling costs and poor delivery on the Fairfield Halls project. No one seems to know where much of the £67million was spent.
Nor has anyone ever been held to account for the abject mismanagement – at least – of the whole sorry saga.
The council’s auditors have suggested that the awarding of the refurbishment licence to Brick by Brick was intended to get around procurement law.
In a Report In The Public Interest into the Fairfield fiasco published earlier this year by Grant Thornton, they said, “In our view, it is likely that the licence did not reflect the underlying reality of the arrangements…
“It is our view that the licence was (at least in part) intended to circumvent procurement law and competitive tendering.”
The lead auditor, Sarah Ironmonger, said that their work was made more difficult because of the council’s failure to keep full records, documents and minutes.
The whole Fairfield Halls refurbishment was meant to be paid for by development deals involving property on a site next to the arts centre, a deal which could have been worth tens of millions of pounds. Yet according to Ironmonger, none of the agreements to transfer the College Green land or for the provision of a multi-million pound loan to Brick by Brick could be found.
“We are unsure of the legality,” Ironmonger told a council meeting in February. “This could be viewed as a breach of procurement law.”
It took an interim monitoring officer, the council’s senior legal official, John Jones, to order a fraud investigation into the Fairfield fiasco, and in March this year Kroll, an American corporate investigation and risk consulting firm, was called in to sift through the evidence to find any trace of where all that money’s gone.
Six months on, according to an official council response to a written question from Conservative councillor Robert Ward, and Kroll has yet to find anything worth notifying the police about.
The bill for Kroll’s “deep” trawl through the Fairfield fiasco evidence is likely to top £300,000, though.
In his question, just published by the council, Ward asked: “At the council meeting on 3rd February 2022, the then Monitoring Officer announced that he was initiating investigations into possible offences under the Fraud Act.
“At the council meeting on 23rd March 2022 Councillor King in response to a question stated that this contract had been awarded to Kroll and that the work was ongoing.”
Ward, one of the more dogged and perceptive of the borough’s 70 councillors, asked Jason Cummings, the cabinet member for finance, for the terms of reference of the work being undertaken by Kroll, a “summary of the current state of these investigations including any initial findings, the cost so far to the council, and an estimate of the expected total cost and the completion date”, and for a “statement on what information in relation to the work by Kroll has been shared with the police”.
Cummings’ answer suggests that, despite six months’ work by Kroll, and the testimony of the senior Grant Thornton auditors, nothing much has been uncovered.
“Kroll were commissioned to complete an initial ‘scope of investigation’ Stage 1 reporting into events around the refurbishment of Fairfield Halls (including the decision-making process) and related expenditure overruns, to identify whether there are indications of any conflict of interest or wrongdoing, to consider the need for further or wider investigation (depending on the issues arising) and to define a detailed investigation plan and methodology,” Cummings wrote in his response.
“The initial findings were that there are a number of issues and questions which warrant further investigation.
“Kroll also advised the council on how to approach such an investigation.
“This scoping analysis was designed to establish the key background facts and lay the foundations for a detailed investigation and, therefore, formed an essential part of the exercise. This has been completed at a cost of £38,000 and has set out a detailed investigation plan which the council has agreed.
“The detailed forensic investigation cost will be in the region of £250,000 plus IT costs of circa £20,000 and will set out the findings of the investigation.
“This is due to complete October 2022.
“The investigation by Kroll will aim to provide clarity over the probity and integrity of decision-making around the Fairfield Halls project, the reasons for the cost overrun and late delivery and the governance failures and whether there is evidence of potential wrongdoing by relevant individuals.
“At the conclusion of the proposed detailed investigation, Kroll will produce an evidence-based report that will conclude on these matters in line with the evidence gathered.
“The police have been made aware of Kroll’s appointment but, to date, no need has arisen to share any information with the police.”
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: The grand scandal at the centre of Fairfield’s absurd saga
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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