CROYDON IN CRISIS: Investigators from Kroll never had investigatory powers to check people’s bank accounts in the search for possible fraud over the £73m refurbishment of the Fairfield Halls. But there was evidence in the public domain of ‘direct personal gain’, as STEVEN DOWNES reports
The Kroll Report into the £73million Fairfield fiasco, finally released last week, provides little detail we didn’t already know.
Much of that work was initially done, after all, as long ago as 2021 by auditors Grant Thornton in their Report In The Public Interest. There was also other material revealed by the Penn Report, which when the council refused to publish it, this website did in 2022.
Besides, from the very first moment the public was allowed back into the Fairfield Halls in September 2019, when it reopened after the over-running three-and-a-half year closure for “refurbishment”, it was clear that the project had been badly botched and that few of the upgrades and modernisations expected or promised for the ageing venue had been done.
Deadly duo: Jo Negrini and Colm Lacey, who she appointed as the council’s development chief, withheld vital details about the Fairfield project and Brick by Brick
The extent of the overspend, more than £40million, in the works supervised by Brick by Brick had not been released at the time – it was just a year before the council cascaded into its financial collapse.
But even in 2019, most agreed upon visiting the arts venue upon its reopening that what had been delivered was little more than a fresh coat of paint.
What the Kroll Report makes clear, though, is that from as early as 2011, under Conservative as well as Labour council administrations, senior council staff always knew that the promised refurb could never be achieved on a budget of £30million. The council cabinet member for development in the period up to 2014 was Tory councillor Jason Perry.
The Kroll report suggests that from 2014 onwards, at the centre of every decision to go ahead with the project was Jo Negrini, and her sidekick, Colm Lacey.
Most shockingly, Kroll confirms what many elected councillors long suspected: that Negrini and Lacey covered up and suppressed essential details about the Fairfield Halls project and housing company Brick by Brick’s finances.
In their report, Kroll refers to the council as “LBC” and Brick by Brick as “BBB”.
Architecture fans: Negrini and Lacey were easily impressed with fancy CGIs, and pandered to fashionable firms of architects. Negrini’s generosity with public money to architects was rewarded with an honorary fellowship of RIBA, even though she has no architecture qualifications, while Lacey got work with one swanky firm after he left BxB
From early 2016 – before the works began – they note: “The projected discrepancy between cost estimates and the allocated budget was acknowledged internally on numerous occasions by senior officers [council staff] of LBC, including Mr Lacey and Ms Negrini…
“… This discrepancy of costed design estimates, deliverability of the scheme and the budget risk wasn’t reported to members [councillors] in the June 2016 cabinet report.” Our italics.
June 2016 was around the time that Negrini was moving up to Croydon’s top job, its chief executive, from being the council’s “director of place”, where she was initially responsible for proposing the establishment of the council-owned housing company Brick by Brick and to link the Fairfield refurbishment to a housing development on the neighbouring site, College Green, all part of her “Cultural Quarter” scheme.
Kroll’s deep dive into council papers found that Negrini had been editing reports to councillors and even doctoring guidance documents provided by outside, third-party contractors.
“The fact that the Summary Matrix prepared by Mott MacDonald [contractors] was edited, was not disclosed to [councillors].”
Kroll also suggests that when it came to appoint someone to head up the council’s new housing development company, it was Lacey who drew up the terms and conditions so that he could be installed.
Kroll found a document that “set out that BBB would initially be staffed by LBC officers [council staff] under a service level agreement and that Mr Lacey act as its managing director.
Man of action: Colm Lacey was handed the job of MD at Brick by Brick, without any recruitment process
“We have not identified any substantive recruitment procedures for this role, and we note that HR staff at LBC raised concerns as to the lack of clarity surrounding his recruitment process.” Cushty.
It has long been suggested that Lacey was vastly under-qualified to head up a multi-million-pound development firm. Lacey had never worked in the private sector, though he had been a colleague of Negrini at Lambeth and later Newham councils.
Grant Thornton, in their RIPI2 , on the Fairfield Halls had indicated four instances of suspected fraud or wrong-doing over the commissioning and conduct of the Fairfield Halls project, and they highlighted how Croydon Council had ducked European rules requiring competitive tendering for public works by handing a licence to Brick by Brick to carry out the refurbishment.
But in their report, Kroll states, “While we have not found evidence of any fraud or direct personal gain, our review has identified a number of instances where information was seemingly deliberately withheld from, or mischaracterised to, cabinet and a number of conflicts of interest and issues around [Brick by Brick] independence in relation to [Croydon Council].”
Kroll lack the investigative powers of the police or HMRC, so had no capability of trawling through people’s bank account details to locate evidence of fraud or direct personal gain. Yet there have been examples in plain sight of Negrini receiving some “direct personal gain”.
Take the time in 2016, when Negrini was made an Honorary Fellow of the Royal Institute of British Architects, even though she has never worked as an architect nor had any architecture qualifications. The president-elect of RIBA at the time was Ben Derbyshire, the chairman of architecture firm HTA Design.
Big fan: Ben Derbyshire was president-elect of RIBA when Negrini got her fellowship
Then, not long after she whizzed out of the exit door of Fisher’s Folly with £437,000 of public dosh in her Gucci handbag from her controversial pay-off, Negrini waltzed in to a new job with Arup, another leading firm that had been awarded contracts during her time at Croydon.
Negrini did not make herself available for interview by the nice people at Kroll for their report, so perhaps she will have told them that her FRIBA and Arup job were all down to her massive skills and abilities…
Elsewhere in the 260-page report, Kroll – as did the auditors at Grant Thornton before them – question whether the whole Brick by Brick arrangement was unlawful, “… there being no properly executed contractual or loan documents in place, stated view of BBB as an independent company was open to challenge, and that the lawfulness of payments made to BBB in relation to the project were called into question”.
At a time when council funding was being squeezed by the government, Brick by Brick and the Fairfield project offered a cunning solution: “Once BBB was appointed to the project in June 2016… the funding mechanism changed from direct costs incurred by LBC, to a loan facility provided to BBB. This had the result of releasing the capital allocated to the project, allowing it to be spent elsewhere.”
Hands up: Jo Negrini walked away from Croydon Council with a £437,000 pay-off, and was soon hired by one of the companies that was cotracted by the council
But by doing this, Negrini, and council finance director Richard Simpson, whether inadvertently or not, loaded huge financial risk on to … the people of Croydon.
“The way the project was structured meant that BBB was subject to substantial commercial risk, as the project was only viable as part of the College Green scheme.
“It should also be made clear that as BBB was wholly owned and wholly funded by LBC, LBC alone bore the full risk of any failed development projects undertaken by BBB.”
Kroll did not get access to all the documents that they wanted to review. As well as Negrini and Lacey either refusing to or “withdrawing” from being interviewed, Kroll reported that all email records and the work laptop of Lacey had been wiped or could not be found. The lost emails were all because of “employee error on their side”, according to Brick by Brick’s IT provider. Which seems remarkably convenient.
But they keep coming back to one obvious conclusion: “From interviews with LBC staff outlining the decision-making processes… it appears that Ms Negrini had ultimate responsibility for the decision to recommend BBB to the project.
“We have not identified any formal documented decision detailing the rationale for this decision or the basis on which it was made.” Well you wouldn’t, would you?
Elsewhere, they lay out the responsibilities for the Fairfield fiasco quite starkly: “As chief executive officer and head of paid service, Ms Negrini was under statutory obligation in terms of Section 4 of the Local Government and Housing Act 1989 for the management of LBC… They must report to and provide information for the cabinet, the full council, and other committees… Ms Negrini was notified of the project overspend in September 2018 and failed to ensure that this was reported publicly at that time.”
And they also say that, “Ms Negrini and Mr Lacey were the architects of its operational and governance procedures [for Brick by Brick] which did not adopt the arms-length recommendations set out in the legal advice from Pinsent Masons [external lawyers].”
Read more: After four-year delay, council to submit complaint reports
Read more: Police drop all investigations into council’s financial collapse
Read more: Negrini’s fellowship and council’s deal with architects’ firm
Read more: CEO of loss-making Brick by Brick gets cosy job with architects
Read more: CEO Negrini’s long campaign to shut down Inside Croydon
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