CROYDON IN CRISIS: Companies House filings today mark the latest stage in winding up the council’s failed housing developer. But clearing the paperwork does not mean recovering the money. By STEVEN DOWNES
Someone in Fisher’s Folly must have a very dark sense of humour. Or they are a sadist.
Just after two o’clock today, a flurry of notifications appeared on the Companies House website showing Brick by Brick’s “satisfaction of charges”. It represented the multi-million-pound wreckage of the council’s failed housing developer finally being cleared from the official register.
Today, November 11, also just happens to be the sixth anniversary of Croydon Council issuing a Section 114 notice, the admission it could no longer balance its books – in large part because Brick by Brick had failed to make its debt repayments.
Documents published at Companies House today show 29 of the council-owned developer’s 30 registered charges marked as “satisfied”. Behind that reassuring-sounding word lies a rather less satisfactory outcome for Croydon residents: £64.7million of loan principal approved for write-off.
Busy day at Companies House: a flurry of filings were made by Brick by Brick this afternoon
That is money lent by the council which it has agreed to forgo recovering from its own company.
The latest paperwork brings the end of Brick by Brick closer.
On November 11, 2020, the council’s then finance director, Lisa Taylor, issued Croydon’s first Section 114 notice, the formal warning that expenditure would exceed available resources (the council has issued two S114s since – a world record).
Brick by Brick’s inability to deliver expected interest and dividend payments was among the reasons Taylor gave for the S114. The council had built spending plans around income which its developer could not reliably provide.
Six years later, the promised returns have given way to a write-off.
Inside Croydon has previously reported that the company borrowed around £200million and that approximately £68million would be left unpaid. The council’s formal decision of April 1 this year provides a more precise figure for the final loan-principal write-off: £64.7million. That decision retained a separate £1million loan balance to cover unforeseen risks.
The £64.7million is therefore the clearest published figure for the loaned money the council agreed to surrender. It is not a calculation of every cost associated with Brick by Brick, including financing costs or income once promised and never delivered.
Nor is it a fresh loss announced today. The council says the write-off had already been provided for in its accounts.
Today’s filings concern the legal security behind the lending.
A “charge” is the lender’s protection over property or other assets, broadly comparable with the security a mortgage lender holds over a home. Brick by Brick granted those protections to Croydon Council against dozens of sites across the borough.
The Companies House register records 29 charges satisfied on November 11. These include securities covering Auckland Rise, Homefield House, Warbank Crescent, Wandle Road and Lion Green Road, the site of the “architect-designed award-winning” Red Clover Gardens.
Expensive housing: we learned today that Croydon Council gave Brick by Brick a maximum loan facility of £34.41m for this one site on Lion Green Road
But the satisfaction notices do not say how much cash changed hands.
They cannot be read as receipts showing that the council has recovered every pound originally lent.
The original deeds contain some eye-watering figures, some of which have never previously been made public – despite it involving multi-millions of public money.
The Lion Green Road charge refers to a maximum facility of £34.41million, Wandle Road £34.38million.
A later, 2021 charge refers to £161.57million and covers 35 property entries.
Added together, those figures add up to
£230.36million
That is not BxB’s total borrowing nor its unpaid debt.
These are historic lending limits attached to (some) overlapping security arrangements. Adding the paperwork together does not reveal an additional pot of missing money.
So is this, finally, the last Croydon will hear of Brick by Brick?
The company itself has not yet disappeared. Companies House still lists it as in liquidation, following the winding-up resolution passed on April 2.
One charge remains outstanding: the January 2018 security covering the company’s assets generally. So today’s flurry of activity shows the process advancing, rather than a completed closure.
The council’s April decision also says that it will benefit from further proceeds only after the liquidators have settled liabilities, claims and their fees (external solicitors Browne Jacobson will do rather well out of all of this process, yet again). Any final recovery still needs to be demonstrated through the liquidation accounts.
Bricking it: Colm Lacey, the MD at Brick by Brick, ran the company for two years without a finance chief
And a company’s eventual disappearance does not resolve the problems experienced by people living in its buildings. Inside Croydon reported in 2024 on residents’ complaints about defects, maintenance, fire safety and uncertainty over their homes’ future management.
For the council, these filings are just another step towards shutting the company down. For residents, they are no guarantee that the consequences have ended.
Six years after the Section 114 Notice, one part of the reckoning is clear: Croydon agreed to write off £64.7million of the principal owed by its housing company.
Brick by Brick may be approaching the end of its corporate life. Croydon residents will be paying for its failures for many years to come.
Read more: Council’s £68m write-off as Brick by Brick goes into liquidation
Read more: Perry agrees to pay £½m to reclaim flats at Red Clover Gardens
Read more: BxB’s collapse was predictable. Why did no one else notice?
Read more: Building towards the council’s financial ruin, Brick by Brick
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