Home > Issue

Issue - meetings

Outcome of the review of Brick by Brick and decision on its future

Meeting: 18/02/2021 - Cabinet (Item 19)

19 Review of Brick by Brick Croydon Ltd: Brick by Brick Shareholder decision - the future of the company pdf icon PDF 308 KB

Cabinet Member: Leader of the Council, Councillor Hamida Ali

Officer: Interim Chief Executive, Katherine Kerswell

Key decision: yes

Additional documents:

Minutes:

The Leader introduced the report noting that it marked a significant moment in the context of the council’s recovery and thanked Chris Buss, Consultant, for his work in reviewing the options for the future of Brick by Brick. Options before Cabinet were the product of two sets of detailed analysis which had been undertaken. The first of which was assess how the company was operating and the council’s relationship with the company. That report had also identified a series of possible options which required further analysis. It was reported that following that initial report in November 2020 progress had been made to progress the recommendations with the appointment of non-executive directors with significant financial experience. Furthermore, the company had appointed a Finance Director, which had been a key recommendation from PwC, and significant work was underway to review and reconcile the loan agreements which were in place.

 

It was stated that the second analysis, which was contained within the report before Cabinet, had been designed to support the council to make a decision on how to move forward in terms of the future of the company. The Leader stressed that a fundamental principle driving the consideration of the most appropriate option had been to minimise the loss to the public. The first report had set out seven options and following further analysis an additional option had emerged; that the council conclude its relationship with Brick by Brick in October 2021 with the completion of the 29 remaining sites. Cabinet were asked to agree that option, subject to further exploration of possibly selling the company which still posed risk and challenge, as outlined within the report, but it was felt that there was less risk to the council with this option.

 

The Cabinet Member for Culture & Regeneration thanked those involved in undertaking the assessment and developing the report. It was highlighted by the Cabinet Member that the report recommended loaning Brick by Brick an additional up to £10m; as such he sought reassurance that any additional lending would be monitored by the council to ensure terms and conditions were adhered to and that the money was repaid to the council. In response, the Leader confirmed that there was recommendation for the council to make up to £10m available to Brick by Brick. It was further confirmed that the sale receipts from those sites which were due to complete before October 2021 would be used by Brick by Brick to limit the lending to the company. Work was also underway to reconcile the number of loan agreements which were in place to ensure there was absolute understanding between Brick by Brick and the council on those agreements.

 

Chris Buss, Consultant, confirmed that the loan agreements between the council and Brick by Brick were being worked through and that following a Cabinet decision a meeting would be held with the lawyers to review and finalise an agreement. Members were advised that the council would be, following agreement of the recommendations, dealing with an  ...  view the full minutes text for item 19