Fairfield: Investigating £300,000 council fraud and still no answers
EXCLUSIVE: The Council says its specialist investigators have yet to find anything around the botched £67million renovation of the arts center that needs to be reported to the police. By STEVEN DOWNES
An investigation to find out if there was fraud committed when the £30million project to refurbish the Fairfield Halls ended up costing £67million will not be completed until October, at the earliest, and will cost at least to the taxpayers of the bankrupt borough council. £300,000.
That’s according to a long-delayed council response to an official question about the Fairfield Halls brewery scandal, where a two-year renovation project took nearly four years but was never completed nor all of the work completed.
As a survey of Inside Croydon revealed in 2020, Fairfield’s work was carried out under the supervision of Brick by Brick, the council-owned housing developer, although the firm has no experience or experience in managing complex projects with heritage buildings. Croydon Council, under Tony Newman and Alison Butler, never put the project management contract out to tender, as is required for most council-funded projects.
Butler, the former deputy leader of the council and cabinet member for housing, resigned from the council in May, while Newman resigned as leader of the council in October 2020. He was suspended from the Labor Party for three months more late. Newman remains under “administrative suspension” by the Labor Party.
There has never been a satisfactory explanation for the spiraling costs and poor delivery of the Fairfield Halls project. No one seems to know where much of the £67m has been spent.
Nor has anyone ever been held responsible for the abject mismanagement – at least – of the whole sad saga.
Board auditors suggested that awarding the renovation license to Brick by Brick was intended to circumvent public procurement law.
In a public interest report on the Fairfield fiasco released earlier this year by Grant Thornton, they said: “In our view, it is likely that the license does not reflect the underlying reality of the arrangements…
“We believe that the license was (at least in part) intended to circumvent the law on public procurement and tenders.”
Lead auditor Sarah Ironmonger said their job was made more difficult by the council’s inability to keep complete records, documents and minutes.
The entire refurbishment of Fairfield Halls was to be paid for by development deals involving property on a site next to the arts centre, a deal which could have been worth tens of millions of pounds. Yet, according to Ironmonger, none of the deals to transfer the land from College Green or to provide a multi-million pound loan to Brick by Brick could be found.
“We’re not sure of the legality,” Ironmonger said at a February board meeting. “This could be considered a breach of public procurement law.”
It took an acting watchdog, the council’s top legal officer, John Jones, to order an investigation into the fraud in the Fairfield fiasco, and in March this year, Kroll, an American investigation and risk consultancy, was called in to sift through the evidence. to find a trail of where all that money went.
Six months on, according to an official council response to a written question from Conservative Councilor Robert Ward, and Kroll has yet to find anything worth telling the police.
However, the bill for Kroll’s ‘deep’ trawl through the evidence of the Fairfield fiasco is set to exceed £300,000.
In his question, which was just posted by council, Ward asked: ‘At the meeting of council on February 3, 2022, the then oversight officer announced that he was initiating investigations into possible offenses under fraud law.
“At the March 23, 2022 council meeting, Councilor King, in response to a question, said that this contract had been awarded to Kroll and work was in progress.”
Ward, one of the 70 most stubborn and insightful councilors in the borough, asked Jason Cummings, the finance cabinet member, for the terms of reference for the work being undertaken by Kroll, a “summary of the current state of such investigations, including any initial findings, the cost to date to the board and an estimate of the total expected cost and date of completion”, and for a “statement of information relating to Kroll’s work which has been shared with the police.
Cummings’ response suggests that, despite Kroll’s six months’ work and the testimony of Grant Thornton’s lead auditors, nothing good has been uncovered.
“Kroll was commissioned to complete an initial Stage 1 ‘Scope of Inquiry’ report on Fairfield Halls refurbishment events (including the decision-making process) and associated cost overruns, to identify whether there are any indications of a conflict of interest or wrongdoing, consider the need for further or broader investigation (depending on the issues that arise), and define a plan and a detailed survey methodology,” Cummings wrote in his response.
“Initial findings have been that there are a number of issues and questions that warrant further investigation.
“Kroll also advised the council on how to approach such an investigation.
“This scoping analysis was designed to establish the key background facts and lay the foundation for a detailed investigation and therefore formed a vital part of the exercise. This was completed at a cost of £38,000 and drew up a detailed investigation plan which the council accepted.
“The detailed cost of the forensic inquest will be around £250,000 plus IT costs of around £20,000 and will set out the findings of the inquest.
“It should end in October 2022.
“Kroll’s investigation will seek to clarify the probity and integrity of decision-making around the Fairfield Halls project, the reasons for the cost and delivery overruns and governance failures and whether there is evidence of potential wrongdoing by those involved.
“At the end of the proposed detailed investigation, Kroll will produce an evidence-based report that will conclude on these matters in accordance with the evidence gathered.
“The police have been informed of Kroll’s appointment but, at this time, there is no need to share any information with the police.”
Croydon is London’s Borough of Culture 2023…
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