Croydon taxpayers can be expected to cover at least part of the millions of pounds that the council-owned developer Brick by Brick has overspent in developing the Fairfield Halls arts centre into flats, Conservative Councillor Jason Cummings has said.
The total cost of the Fairfield Halls project came to £42.6 million, up more than £12 million from the original budget.
“I think this could have been avoided. The whole situation with Fairfield Halls is indicative of what has gone wrong in Croydon,” Cummings told the Guardian.
Cummings, who is deputy leader of the opposition, said Brick by Brick had no experience of the type of refurbishment and modernisation of an arts and entertainment venue.
He said: “The worst thing is that it is going to be the taxpayers of Croydon having to pay.”
Brick by Brick received planning permission to build hundreds of homes next to Fairfield Halls in 2019 but the nearly £208 million sums Croydon Council provided to the developer has added to the council’s financial downfall.
The council declared itself effectively bankrupt in late 2020 after issuing a Section 113 notice that put a hold on all non-essential spending.
Brick by Brick aimed to develop affordable homes in Croydon but the developer lost more than £800,000 between 2019 and 2020, on top of the nearly £660,000 it lost in 2018.
At the last scrutiny committee meeting held to discuss the development in February 2021, Chris Buss, former Director of Finance and Deputy Chief Executive at Wandsworth Council, said: “The intention was that there would be no cost to the council.
“Brick by Brick would refurbish the halls and build out the land next to it and the council would pay nothing and get its loan back through the proceeds of the flats being built next door.”
The land sold will now not be given to Brick by Brick and instead, the council is expected to try and sell this to different developers to make up some of the loss.
This article was amended on April 15 to correct the amount overspent on the Fairfield Halls project.