CROYDON IN CRISIS: Yet more bad news finally emerging into the public record. By BARRATT HOLMES, our house building correspondent
Even when it is no longer paying above the odds to build new homes, Brick by Brick continues to lose money.
The wholly-owned housebuilder, which over five years from 2015 was loaned £200million by Croydon Council which led directly to the authority’s financial collapse in 2020, has just published its official annual accounts for the financial year to the end of March 2023 and they show it made another loss of £7.6million.
That’s a whole heap better than the £20million loss recorded in 2021-2022, but it comes after a year in which the failed company, which is oh, so slowly being wound-up, managed to sell £73million-worth of assets, all of which had been built using public money.
The accounts show “cost of sales” at £70.7million, which doesn’t leave much margin for profit, and after being hit by “finance costs” – loan interest mainly – of £8.4million, it means that Brick by Brick’s record of never actually managing to make any profit has been maintained yet again. Has anyone seen erstwhile “managing director” Colm Lacey?
Apart from the bald details recorded in the accounts in black and white (and, notionally, a great deal of red ink, too), the report to Companies House is unnecessarily coy about certain other key details about the company’s operations in the 12 months to last March.
Sold!: Flyover Towers was one of the major sales by BxB in 2022-2023, according to Companies House records
Duncan Whitfield, the official from Southwark Council who was among the directors appointed in 2021 with the task of extracting something, anything, from the wreckage left by Lacey and his fellow ego-trippers, attributes a loss of £8million “due to write downs in expected sales prices for undeveloped land and the level of interest payable to” Croydon Council.
The report also references how rising interest rates had made its sales operations more difficult, as potential home-buyers nervously contemplated their steepling mortgage payments.
Significant sales were made, although Whitfield and his fellow directors in their annual report avoid saying for how much, and to whom.
“During the year to 31 March 2023 individual apartments were sold to owner occupiers and bulk sales of entire blocks or entire developments were sold to investors, including the bulk sale of 128 units at Kindred House…”, they mean “homes” in Flyover Towers, “… to an investment group that will provide affordable housing and private housing.” The report neglects to state who that “investment group” might be.
The report states that other properties were also sold to… Croydon Council, “for use as affordable housing”. Which is nice.
It is impossible to know with certainty, but by process of elimination it seems that, as at 11 months ago, Red Clover Gardens, the long-ago-completed, long-empty flats on Lion Green Lane in Coulsdon is the last major BxB development to be sold – a deal that has still yet to be sealed.
In black and white and in the red: even with £72.9m-worth of sales, Brick by Brick has still be losing money
According to the most recent figures made available, Brick by Brick repaid loans to the council totalling £47million in 2022-2023 (and it did not borrow that amount from the council, as erroneously reported by Tony McArdle and the so-called improvement and assurance panel).
This followed £30.4million that was repaid in 2021-2022.
A report to a council cabinet meeting next week states that Brick by Brick’s outstanding loan balance at the end of March 2023 was £103.93million “and all accrued interest has now been paid back to the council”.
Bricking it: Colm Lacey, the MD at Brick by Brick who bankrupted a borough
The cabinet report suggests that Croydon expects to write-off up to £68million in loans to Brick by Brick – a good deal less than was originally feared in the immediate aftermath of the council’s financial nose-dive, but still enough to cause widespread cuts to council services for many years to come while Council Tax has been sent soaring.
The council report said: “The council has not received any dividend returns from the company, which was one of the intended aims. Instead, the council will have no choice but to write off a large loan balance and fund the write-off from its own budgets following the non-repayment of debt by Brick by Brick.”
Read more: Council risks being in the red over BxB’s Red Clover Gardens
Read more: Council set to lend more money to failing Brick by Brick
Read more: ‘An accountant could have foreseen this more than a year ago’
Read more: £36m Brick by Brick ‘risk’ helped to trigger Croydon’s S114
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Thankyou for posting this story. It comes, at a very timely moment as we are led to believe, the deal on the Red Clover Gardens estate (#Marie Celeste) in Lion Green Road Coulsdon is about to close.
It will be interesting to hear how this transaction has been finally transacted and exactly how much will be returned to the administrators of Brick by Brick and its shareholders London Borough of Croydon?
Equally, the subsequent costs and potential liabilities for the council in ongoing sub lease arrangements 🤔
Who can’t forget the never ending tweets by @croydonsean of how Brick by Brick will generate a profit for the Council from Housing even as it had run onto the rocks of reality. What is this humbug Sean Fitzsimmons doing now. According to his register of interests he is now working in the Housing Sector after completing his urban development masters. There is really no hope with these complete charlatans making decisions that have caused so much misery in Croydon. There is no hope for us.
He was only the chair of… checks notes… the scrutiny committee on £40k a year while acting as a cheerleader for Lacey and BxB! Nothing got past Sean!
I would be interested to know what will now happen to the small plot of lawn next to Ruskin House, on the corner of Coombe Road and Edridge Road. Dick-by-Dick planned to put houses and flats on this minuscule plot, currently occupied by a bench and a sapling. It made no sense, obvs. But is it still at risk?
Same thing happened opposite me. Planning application put in for houses and flats on a council green space. Thankfully, application withdrawn after council went bust. I asked same question and was told ownership remained with council. Would only have transferred to BxB if planning approved.
Anyone from Croydon Council going to MIPIM this year? They could run seminars on how not to develop real estate.
Why has no one been prosecuted over this fiasco every last penny needs to be accounted for all the directors should have all their assets and bank accounts looked at by the fraud squad starting with Fairfield halls disaster all the amount of money being thrown around like monopoly money needs looking in to to see who had sticky fingers I’ve been in the building Trade most of my my life I’ve seen greed and corruption and if this is not tainted with it I will eat my hat . Now they laugh at us tax payers who keep on coughing up it needs proper fraud squad investigation.
Its the Croydon residents who will lose out hugely, meanwhile little accountability by Lacey or anyone else
Some Councils have done this effectively, shame for the people of Croydon they were not one. Will take many years to recover from this
If this was a private Company the police and administrators would have taken action by now. It seems the public sector can get away with most things on the grounds of incompetence and stupidity. We have yet to hear of anyone being sacked, charged or held accountable in the Council. I wonder why we hear very little from the Council on this?
Brick by Brick has always been registered as a private company.
To answer your question regarding consequences, do a search of the site using the terms “Penn Report” and “Kerswell”.
Where is that waste of space Colm Lacey now? I sincerely hope somebody has not been stupid enough to give a role where he has to make decisions. What a chump, he was. A complete vacuum.
What will it take to wipe that smirk off of Colm Lacey’s face?
He could give us back some of the money his enormous ego lost us.
Lacey is still lying about his time in Croydon and still claiming BxB was a success
Not lying. Just deluded! By the look of it Master Lacy does not understand that facts are facts and that a loss is a loss. Perhaps he is just confusing BxB with Airbnb?
Oh, he’s lying.
He’s been lying since 2017