Croydon Council fully accepts the conclusions of its auditor’s (Grant Thornton) Report in the Public Interest on the refurbishment of Fairfield Halls, and the failings of financial control and governance of this project, between June 2016 and September 2019.
In its Report in the Public Interest, the external auditor has concluded that, the council at the time failed to ensure that proper financial control and effective governance arrangements were in place for the project, which was undertaken by Brick by Brick. It was delivered late and cost substantially more than the original £30m budget agreed by cabinet in June 2016.
The report found that the ‘governance gaps’ at the time ‘prevented scrutiny and challenge that may have allowed corrective action to have been taken.’
The report finds that the statutory officers and chief officers throughout the time of the refurbishment, including the then chief executive, the two Section 151 officers and the then monitoring officer, failed to fulfil their statutory duties. All have since left the council.
The council has fully apologised for the historic actions that led to the failings outlined in the report, and has confirmed that the Croydon Renewal Plan is already addressing many of the external auditor’s findings. An action plan will be put in place to address the recommendations arising from this report.
In December 2020, the council’s new administration raised concerns with the external auditor about the historic governance and contract arrangements with Brick by Brick to undertake refurbishment works at Fairfield Halls. Grant Thornton then began a value for money review of these arrangements. The initial findings in the review led to the auditor halting that work and incorporating it into the Report in the Public Interest which has been published today.
The council’s formal response to the auditor’s report, which will be presented to an extraordinary council meeting on Thursday 3 February, will outline the substantial work that has already taken place to address its findings. Over the past 12 months the council has overhauled and strengthened its financial, legal, decision-making and other governance processes, and through its Croydon Renewal Plan is creating a new culture of good decision-making, transparency, accountability and value for money.
The previous Report in the Public Interest, in November 2020, raised serious concerns about the council’s overall financial controls and governance, which led the council to undertake an external independent review of its companies and company structures. Following that review, the council’s intention is to wind down Brick by Brick once it has completed its outstanding building work.
It also replaced the Brick by Brick board with two experienced financial directors and the Fairfield Halls refurbishment contracts were novated and taken back under direct council control. This work has ensured that there are no additional costs to be met by the council from the publication of this report.
“Since I became leader we have been rebuilding the council and tackling the problems of our recent past. Last year we raised serious concerns with the auditor about the historic management of the Fairfield Halls refurbishment which then led to this report.
“The people of Croydon deserve value for money from every penny the council spends. This report shows that the original arrangements for the refurbishment of Fairfield Halls fell well short of that standard.
“I know that people across Croydon will be rightly angry to hear their money wasn’t safeguarded as it should have been and I want to apologise for that on behalf of the council.
“Over the past year we have transformed the way the council operates, appointing a whole new leadership team and strengthening our processes to ensure this could never happen again.
“Fairfield Halls is one of Croydon’s most iconic venues and the council remains committed to supporting the future of this incredible institution.”
Councillor Hamida Ali, leader of the council
Read the Report in the Public Interest in full here.