£68m
This is what a “solvent liquidation” looks like, according to Croydon’s elected Mayor Jason Perry.
That’s the latest final estimate of the exit costs of winding down and closing Brick by Brick, the failed housing company set up by “regeneration practitioner” Jo “Negreedy” Negrini, and councillors Tony Newman and his Labour mates Simon Hall, Alison Butler and Paul Scott.
To date, no recovery action or disciplinary action has been taken against the council’s former chief executive or the ex-councillors, nor against Colm Lacey, the incompetent former CEO of BxB (although Newman and Hall do remain suspended by the Labour Party pending an investigation, a status they have held for three years). Indeed, one of the Newman Numpties who crashed the council’s finances thanks to Brick by Brick now has a job working for a south London council… in their housing department!
This week’s Croydon cabinet meeting rubber-stamped proposals to wind up Brick by Brick now that all its incomplete schemes have all been completed.
“It’s time to bring the sorry saga of Brick By Brick to an end,” Perry said following Wednesday’s cabinet meeting, although the winding down process was begun long before the Tory Mayor was in office, and the final figure won’t really be known until a buyer has been found for the last of Brick by Brick’s dodgy developments.
Incompetent: BxB CEO Colm Lacey
The £68million figure is much reduced from the £100million-plus losses which was estimated could have been incurred when new directors were parachuted in to take over the mess left behind by Lacey and his incompetent chums in 2021, but it will still hurt the cash-strapped council which had loaned more than £200million to the shambolic company without ever receiving a single penny in profit.
And Perry and his Tory councillor friends already know that there will be very many other costs coming the council’s way, as repairs, rebuilds and snagging costs of the poorly managed Brick by Brick developments will now have to be paid for by the authority in the months and years ahead. That unsatisfactory outcome is already being experienced at some of BxB sites.
Negrini, Newman, Hall, and others, tried until the very end to disguise the mounting costs of Brick by Brick and the complete absence of any repayments from the badly managed company. Its latest set of annual accounts, to March 2023, were published recently, revealing yet another year of losses, despite disposing of tens of millions of pounds’ worth of homes.
It was these figures from where the council took its estimates of the final costs of Brick by Brick.
Council reports to the cabinet meeting showed that winding down the company is now expected to cost between £62million and £68million in loan write-offs, with the final amount dependent on the final date of the winddown and asset disposals.
“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.”
As Inside Croydon has previously reported (although the matter was a cause of some confusion to the government-appointed “improvement” panel), Brick by Brick has repaid loans to the council of £47million in 2022-2023 and £30.4million in 2021-2022.
Admission of failure: the costs of Brick by Brick are just as bad as they were before the Tory Mayor took over, while the winding down process began three years ago
The final figures demonstrate that Tory Mayor Perry has had no impact whatsoever on reducing the losses from Brick by Brick.
A council spokesperson said: “Brick by Brick was set up by the previous administration to build new homes in the borough and deliver dividends to the council. The poor performance of the company combined with governance failings contributed to the council’s current debt position of £1.4billion on the general fund.
“It is extremely regrettable that the business activities of Brick by Brick will result in a debt write-off up to £68million. Whilst this has been anticipated and provided for in the council’s Medium Term Financial Strategy since 2022-2023, it still will effectively be funded by local taxpayers.”
One significant Brick by Brick development, Red Clover Gardens in Coulsdon, remains as yet unsold, its 157 flats still sitting vacant, in the middle of a housing crisis, close to two years since the build was finished.
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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ROTTEN BOROUGH AWARDS: In January 2024, Croydon was named among the country’s rottenest boroughs for a SEVENTH successive year in the annual round-up of civic cock-ups in Private Eye magazine
This case should be publicised all over the UK as a portent of what awaits us if a Labour government gets elected.
Take a look at what nearly 14 years of Tory governments has done to the economy, along with all the rampant corruption, asset stripping and blatant rip-offs of us mug taxpayers. D. Nicholls? Deluded, more like it
That’s just silly.
The BxB fiasco has been all to do with Labour. It was the unholy outcome of a response to a perfect storm of crippling Tory policies by a Chief Officer with a truly grandiose ego, a not very bright Leader of the local Party and the servile collusion of an unrealistic acolyte.
Under the same constraints a Tory council would more than likely have created an even bigger cock up!
Jason Perry hired Jo Negrini to head property development in Croydon. This was the value added skill she was employed to bring by the local Conservatives.
Newman’s Labour clearly expanded her role into becoming Chief Executive to take over all aspects of Council Management when she clearly had no experience for the role and the results demonstrate she had no aptitude for it either.
We must be clear on the role of Central Government amongst all this. It compensated for the drastic cuts in grant funding of council services, by allowing them to use investment money for direct provision of council capital infrastructure to be instead used to raise income that had been deprived to Councils. Only by permitting this change of use – Central Government facilitated the creation of council owned housing companies which role was not to provide council housing, but was to make a profit by speculating in property.
Please can we be clear on the origin of Croydon’s bankruptcy. The local Tory and Labour Regimes are the effects of a failed policy.
Would you kindly specify what you consider Tory governments have done to the economy? Bear in mind that we have experienced Covid and are currently helping Ukraine with its fight against Russia. This government gave considerable financial help to people and businesses through the pandemic. Without that help it is likely that many more people would be in serious financial difficulties.
Hahahahahahaha
With all due respect what has this to do with the local government financial crisis. If you are unable to process facts and try to divert attention from the matter in hand. That is your problem, which is that you are completely irrelevant.
The term housing crisis, as an excuse for not actually selling 157 completed apartments, finished by a developer, who went on to receive a prestigious award in the construction industry is rather debatable 🤔
Given the location, situated in very close proximity to one of the best rail links to London, airports and much of the rest of the country, would one might expect, have made for desirable purchases if they had been actually marketed via knowledgeable local estate agents.
Great irony, is a current bill board poster, advertising a similar estate, currently being built in Pampisford Road, Purley, is located at Coulsdon South railway station🙄
So why can’t they use those 157 flats be used for affordable and counsil housing for those that need help . Of course how stupid of me it will be sold of at low cost to a dodgy company so they can make millions.
Not sure about Tory government comment as the more money you give local government ie Croydon as the more you give the more they spend
Look at Croydon an improvement panel with the chair getting a £1000 a day without the other wages just a joke
When I last looked at the development squeezed up against Purley Oaks Station was far off completion and looked like it had been abandoned for a considerable period. Has this now been completed and ready for sale? It would have had a turnaround completion time that the Negrini/Newman Regime would have dreamt of if this is the case.
The council’s loan agreement permits them, as lender, to foreclose on the assets which the loan is charged against.
If they’ve not sold Red Clover gardens, then they should take the property and either sell or use for the council (as Local Authority) I.e. provide much needed home to people on the housing waiting list.
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