Agenda item

Ongoing Review of Brick by Brick Croydon Ltd and the future of the company

Cabinet Member: Leader of the Council, Councillor Hamida Ali

Officer: Interim Chief Executive, Katherine Kerswell and Interim Director of Finance, Investment & Risk and Section 151 Officer, Chris Buss

Key decision: yes

Decision:

The Leader of the Council delegated authority to the Cabinet to make the following decisions:

 

Cabinet RESOLVED (acting, where relevant, on behalf of the Council exercising its functions as sole shareholder of Brick by Brick Croydon Ltd) to:

 

1.           Reject the offer for the purchase of Brick by Brick (Croydon) Ltd.

 

2.           Agree that a modified build out scenario of 23 sites will be implemented and to note that in order to deliver that, Brick by Brick will require additional management and technical support, the costs of which are factored into the costs shown in this report and as further consequence of this decision that Brick by Brick will return 5 sites to the Council on the basis that they will be marketed for sale (and on the basis that site ownership will either remain with Brick by Brick or transfer to the Council, whichever is most efficient for maximizing value or the efficiency of the sale process). The remaining site of Belgrave and Grosvenor to be deferred pending the completion of the stock survey being undertaken in adjoining council buildings and to be brought to a future Cabinet meeting for final consideration.

 

3.           Agree that the decisions made under this Report shall take effect as amendments to the current Business Plan of Brick by Brick (and as a shareholder decision under the Articles of the company). In addition, and also as shareholder, the Council will require Brick by Brick to issue monthly reports to the Council to update on its financial position, progress with development of sites, sales, any key contractual issues and any other relevant matter (as needed). Such reports are to be presented to the Cabinet on a quarterly basis.

 

4.           Confirm that, in accordance with the February Cabinet report, sales receipts may continue to be recycled by Brick by Brick and agree that the S151 Officer, in consultation with the Chief Executive and Monitoring Officer be given authority to approve those ad-hoc sales receipt recycling requests from Brick by Brick, up to a total amount of £5m in any one transaction and following the terms of the consolidated loan agreement, reporting on a quarterly basis to Cabinet.

 

5.           Delegate authority to the Section 151 Officer, in consultation with the Chief Executive and Monitoring Officer, to make any necessary formal shareholder resolutions in order to give effect to the above recommendations and to authorise the entering into any of the necessary formal legal documentation that arise as a consequence (including (i) to confirm the appointment of consultants to provide the necessary additional management and technical support, and (ii) in respect of the sale of the 6 sites, as are referred to in recommendation 2).

 

6.           Delegate authority to the Section 151 Officer, in consultation with the Chief Executive and Monitoring Officer, to vary the loan agreement in respect of the sites returned to the Council sites (subject to SDLT and various other tax advice) and with any such modifications being reported in the quarterly report to Cabinet.

 

7.           Otherwise note the progress made with regard to Brick by Brick.

 

8.           To thank the Improvement and Assurance Panel for their advice and support in the production of the report.

 

Supporting documents: