Ever since Brick by Brick (BxB) was first established in 2015 Croydon Conservatives have been asking questions about it. Keen to ensure that the Council was getting good value for money, we wanted to know the governance and financial arrangements for this wholly owned Council company and how quickly it would be building the affordable homes needed in our Borough.
We questioned every Annual Report which showed rising sums being loaned whilst the delivery of new homes was not only painfully slow but was largely of expensive properties which have struggled to attract buyers. In addition to this we became increasingly concerned about the sites which Brick by Brick was identifying as suitable for building on.
A large number of planning applications started coming through, many of which proposed building on treasured local green spaces, and which had for years offered local residents lovely green amenity space; essential for those living in flats. The proposals for the many of the sites have caused considerable distress to local residents including those at Sylvan Hill, Tollers Estate in Coulsdon, and the area around Kingsdown Avenue and Montpelier Road – and more recently the proposals to concrete over much of the public open green space in Wontford Road, Kenley and adjacent to the butterfly rich Hutchinson’s Bank in New Addington.
We were shocked by the prices these often large tranches of open green space were being sold to BxB for – just £1 for the Kingsdown/Montpelier site which was to host 34 new homes. And we were very concerned indeed about the consistent waving through of every BxB scheme by the Labour-controlled Planning Committee. Questions around a potential conflict between Cllr Alison Butler, the Labour Cabinet Member responsible for the delivery of homes and the Chair of the Planning Committee being her husband raised by us and concerned residents were abruptly dismissed.
We highlighted issues around the circular nature of the whole Council/BxB financial arrangements – noting that this was all public money going round and round but leaving council tax payers more and more exposed to picking up a massively increasing debt burden.
In the meantime the loans being made to BxB by the Labour Council steadily increased and have recently reached some £250m. But the details on any loan interest payments has always been very vague. Just five weeks ago, at the 21st September Cabinet Meeting, I asked what sums had been repaid and neither the Leader of the Council nor the Cabinet Member for Finance could tell me. In fact it now turns out that not one penny has been re-paid.
At Council, Cabinet and Scrutiny meetings the questions being raised by Conservative councillors have been routinely brushed aside by the Labour administration; we’ve been laughed at, told that we don’t understand or that it’s none of our business. But we never gave up and the recently published Report in the Public Interest by the Council’s external auditors, Grant Thornton, has now supported our very serious concerns and those of thousands of residents right across our Borough.
It is absolutely shocking that the Labour Council has seen fit to play fast and loose with our money and to expose council-tax payers to such extraordinary risk.
Of the 21 recommendations made to the Council to address, the Grant Thornton Report has identified three which solely relate to BxB and one in which this subsidiary is included:
- R17. The Cabinet and Council should reconsider the financial business case for continuing to invest in Brick by Brick before agreeing any further borrowing.
- R18. The Cabinet and Council should review and reconsider the ongoing financial rationale for the Council in the equity investment arrangement with Brick by Brick.
- R19. The s151 officer and monitoring officer should monitor compliance with loan covenants with Brick by Brick and report any breaches to Members.
- R20. The Cabinet and Council should review its arrangements to govern its interest in subsidiaries, how the subsidiaries are linked, the long-term impact of the subsidiaries on the Council’s financial position and how the Council’s and taxpayers interest is safeguarded.
Elected Members and Council officials have a duty to serve the public and have stewardship of public resources. Surely it’s not too much to expect that the people responsible for this outrageous breach of public trust and the pushing of our Council to the brink of bankruptcy, should be held to account.
Croydon deserves so much better than this and it’s appalling that it will be Croydon residents who will end up paying the price for all of this with increased council tax bills and charges – and reduced services.
