£68m
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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