There is a famous book in political circles about how one man effectively took over New York in the early twentieth century and yet very few knew about the hidden nature of how the city’s money and power was used. The author, Robert Caro, won the 1974 Pulitzer Prize for his epic tome “The Power Broker: Robert Moses and The Fall of New York”. This book comes to mind when examining Labour’s shadowy practices in Croydon.
The people of Croydon have been extremely poorly served by the Labour administration that runs the Council. We have just seen the resignation of their Cabinet Member for Finance, Cllr Simon Hall. Only a few days ago I asked him questions about Brick by Brick.
You can see from his evasive answer that things were not right. Let’s take a look at what Labour have been up to.
Brick by Brick Croydon Ltd. is a Private Limited Company. It is 100% owned by the London Borough of Croydon – that’s us. The legal registration at Companies House shows that there is “1 active person with significant control: London Borough of Croydon Council”. Every single penny that this private company has received has come from us, the taxpayers of Croydon.
How much have they received? Look at their publicly available accounts and you can see that more than a QUARTER OF A BILLION POUNDS (£250,000,000) of your money has been “loaned” to Brick by Brick Ltd. The purpose of this was ostensibly to build homes. However, the land on which many of these homes are to be built was effectively gifted to Brick by Brick, often for just £1. Then the money to build those homes also came from Croydon Council (i.e. you and me).
When do they have to pay us back? Incredibly, Labour has told this company that they only have to pay the loan back in increments as and when Brick by Brick sells the last property on each development. How long do you think that’ll take to pay back? Decades? Recently, an interim payment was due back to us, but Labour waived it. When we ask legitimate questions about all of this, we are simply treated to speeches on how awful the Tories are. Evasion and obfuscation has been Labour’s modus operandi.
Now Cllr Hall has resigned. Not only that, six of the original directors of Brick by Brick are gone. In fact, most recently a Croydon Council officer (Julia Pitt) was appointed as a director of Brick by Brick and another officer (Shifa Mustafa) had her appointment terminated. Here is the relevant information from Companies House:
Yet Brick by Brick’s own website shows them both as directors:
We have asked for an explanation but none has been forthcoming. It doesn’t fill the people of Croydon with confidence that controls are so lax in this company that its own website shows incorrect information, even when we have pointed it out to them.
Here is another highly questionable state of affairs from the company’s latest submitted accounts:
So nearly a million pounds is being paid to Brick by Brick employees (many, if not all, formerly from the public sector), including handsome six-figure salaries to its directors. And guess what? All of the risk falls on us, the taxpayers of Croydon. And if you think the chances of us having to bear the losses are remote, think again. In their frenzy of speculation, Labour bought several commercial properties in Croydon, including Croydon Park Hotel. We, the Conservatives, said on record at the time that it was highly inappropriate for a Council to be doing this. Well, recently the hotel called in the receivers because the business became unviable. The keys were handed over to Croydon Council – so we are all now burdened with this as well.
All this raises serious questions about how Labour is handling our money, and about governance and scrutiny. If the activities of Brick by Brick were done by the Council itself, rather than creating an external private company, then all the usual levels of scrutiny and transparency would be in place. We as elected Councillors would be able to ask questions in various committees and Labour would be legally bound to produce answers. One has to wonder why Labour chose this opaque way of doing things, particularly when they are the ones who are usually so keen to bring everything into the public sector.
Finally, what does it mean when directors are abandoning a company? We have heard phrases such as rats deserting a sinking ship. Perhaps that is unkind. It certainly doesn’t fill the public with confidence. There may well be valid reasons, but we would expect to see openness and clear explanations. Unfortunately, we are seeing quite the opposite.
Croydon is on the verge of bankruptcy. Labour’s Cabinet Member for Finance has resigned. The calls are getting ever louder for the Labour Leader, Tony Newman, to step down. Westfield has been chased away. The town centre is an awful mess. A private company has a quarter of a billion pounds of our money but won’t answer the public’s questions.
Croydon has fallen and desperately needs new leadership.
