By Gavin Mackintosh-
Croydon’s cash-strapped council is on the verge of declaring itself bankrupt for a second time in less than 18 months, following a missing £73m , The Eye Of Media.Com has heard.
Failed deals and contracts by the cash battered council’s own companies like Brick and Brick, has exposed it to a string of embarrassing outcomes, leading to several resignations of highly placed officials in the last few years. The negative news associated with Croydon Council doesn’t seem to end.
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An official council report is due to be published ahead of Monday’s scheduled cabinet meeting is expected to expose plans surrounding a series of companies connected to Croydon Affordable Tenures and Croydon Affordable Homes.
As with many other councils that often fall under the radar, Croydon Council is believed to have squandered untold funds in areas like adult social care, children’s services and the Croydon Digital Service.
Auditors have so far declined to sign-off on Croydon’s 2020-2021 accounts covering the period under chief exec Jo Negrini , council leader Tony Newman, and their successors Katherine Kerswell and Hamida Ali. Alarm bells are again ringing with the one and only Croydon Council where failings and scandals of epic proportions are becoming a norm, and a cry for intervention becoming ever so urgent.
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A total of £112million of funding for property purchases used to support problematic budgets of other council departments are also raising legal issues as to potential unlawful conduct, calling for the assistance of legal personnel to prevent the matter getting worse.
Global accountancy consultants PwC have been hired to examine the complicated corporate arrangements which among others in the past have been shown to be another farce of a shamed council in need of desperate help and guidance.
A “private and confidential” review of the council’s housing companies was conducted by PwC in 2020, and published just two days after the council issued its first Section 114 notice. It was not heading in any progressive direction.
Billed as a developer that ‘believed in doing things differently’, Brick By Brick was highly rated and hired an array of top practices, from RIBA Stirling Prize-winners Mikhail Riches to Mary Duggan, and set up an in-house architecture firm.
Brick by Brick has been blamed for consuming hundreds of millions of pounds in council loans, ultimately contributing to the ruin of Croydon Council.
When the Labour-run Croydon Council declared itself bankrupt last year in debt of £1.5 billion, it had loaned its housing delivery arm upwards of £200 million. An expected £14 m back in interest payments came to nothing. Since it was set up, Brick By Brick has incurred losses in every year .
A rescue deal to sell the company to Manchester developer Urban Splash for £100 million was vetoed in favour of a less risky managed programme. Earlier this month its chief executive, Colm Lacey, announced he would be departing. This followed the resignation of Chloë Phelps, the company’s deputy chief executive and head of design at Common Ground Architect.
Last month, £8.6 b of affordable housing funding was allocated to an estimated 90 partnerships across England, including councils, housing associations and private providers.
London mayor Sadiq Khan pledged to use the capital’s £3.46 billion share of this funding package to strengthen a ‘council housing comeback’. Khan is also planning to set up his own low-cost housing developer, backed by the Greater London Authority, but none of this will help rescue Croydon Council, which needs a major miracle to achieve any degree of restoration. The council is one almighty mess.
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