Agenda item

RESOLVED:

1.1.          To approve that Brick by Brick Croydon Ltd be closed down on a solvent basis as detailed under Option 1 of Section 8.

1.2.          To delegate to Corporate Director of Resources (S151 Officer), in consultation with Director of Legal Services, Corporate Director Housing and Director of Commercial Investment & Capital to decide whether the Council under its Housing Revenue Page 82 Account (HRA) and/or General Fund (GF) acquire all or part of the remaining assets and liabilities of BBB if not disposed within a reasonable time frame.

1.3.          To delegate to Corporate Director of Resources (S151 Officer), in consultation with Executive Mayor, Lead Member of Finance, Director of Legal Services, Director of Commercial Investment & Capital to negotiate the sale of Brick by Brick Croydon Ltd should an offer that improves the Council’s financial position, against the winddown position, be received before the proposed winddown date of the company.

1.4.          To delegate to Corporate Director of Resources (S151 Officer), in consultation with Executive Mayor, Lead Member of Finance, Director of Legal Services and Director of Finance to enter into any final legal agreements on behalf of the Council as Shareholder and/or Lender and make any necessary shareholder resolutions, where relevant to give effect to the recommendations and delegated decisions in this report as part of the winddown process.

1.5.          To delegate to Corporate Director of Resources (S151 Officer), in consultation with the Executive Mayor, Lead Member of Finance, Director of Legal Service and Director of Finance to approve the final loan principle write off amount, up to £70m, at the point of winddown.

1.6.          To delegate to the Corporate Director of Resources (S151 Officer), in consultation with the Executive Mayor, Lead Member of Finance, Director of Legal Service and Director of Commercial Investment & Capital to issue letters to current Directors requesting their resignations and to approve indemnification of liability in line with the Outside Bodies Protocol approved by Ethics Committee on 8th February 2023.

1.7.          To delegate to Corporate Director of Resources (S151 Officer), in consultation with the Executive Mayor, Lead Member of Finance, Director of Legal Service and Director of Commercial Investment & Capital to appoint new Directors on the Board of the BBB.

The Executive Mayor introduced the Brick by Brick Closure Report which was established in 2014 to build council homes and deliver housing projects affordably for the council, however, following the council's declaration of bankruptcy in 2021, the council had to make significant steps to recover money from Brick by Brick and now on a process of winding down Brick by Brick to deliver financial stability to the council.

The Cabinet Member for Finance, Councillor Jason Cummings, shared with Cabinet that the key momentum was to close Brick by Brick, having reflected that there had been options in managing Brick by Brick with choices to either continue working with Brick by Brick. To close was the right decisions made following the loss made which has now stopped.

The Leader of the Opposition, Councillor Stuart King, welcomed the report and asked in relation to recommendation 2.3 of the possible sale of Brick by Brick, and whether there had been enquires that this should be included in the list of recommendations; also, in relation to recommendation 2.2 whether a decision had been made for the asset and liabilities to be released to the general fund or Housing Revenue Account.

The Cabinet Member for Finance, Councillor Jason Cummings, responded that with regards to recommendation 2.3 and any potential sale, there was opportunity for a party to purchase Brick by Brick, though noted that during the original options submitted, when reviewing market value, a decision was made to continue the build out. This report, however, sought to cover any options that may create exceptional circumstances where the council would have an offer for better value. With regards to recommendation 2.2 and the Housing Revenue Account and general funds, this regarded an assessment of the individual assets that remained by Brick by Brick to be worked through and value assessed for its use. It was currently unknown what assets would remain, though this was to be addressed on an individual basis.

The Executive Mayor in Cabinet RESOLVED:

1.1.         To approve that Brick by Brick Croydon Ltd be closed down on a solvent basis as detailed under Option 1 of Section 8.

1.2.         To delegate to Corporate Director of Resources (S151 Officer), in consultation with Director of Legal Services, Corporate Director Housing and Director of Commercial Investment & Capital to decide whether the Council under its Housing Revenue Page 82 Account (HRA) and/or General Fund (GF) acquire all or part of the remaining assets and liabilities of BBB if not disposed within a reasonable time frame.

1.3.         To delegate to Corporate Director of Resources (S151 Officer), in consultation with Executive Mayor, Lead Member of Finance, Director of Legal Services, Director of Commercial Investment & Capital to negotiate the sale of Brick by Brick Croydon Ltd should an offer that improves the Council’s financial position, against the winddown position, be received before the proposed winddown date of the company.

1.4.         To delegate to Corporate Director of Resources (S151 Officer), in consultation with Executive Mayor, Lead Member of Finance, Director of Legal Services and Director of Finance to enter into any final legal agreements on behalf of the Council as Shareholder and/or Lender and make any necessary shareholder resolutions, where relevant to give effect to the recommendations and delegated decisions in this report as part of the winddown process.

1.5.         To delegate to Corporate Director of Resources (S151 Officer), in consultation with the Executive Mayor, Lead Member of Finance, Director of Legal Service and Director of Finance to approve the final loan principle write off amount, up to £70m, at the point of winddown.

1.6.         To delegate to the Corporate Director of Resources (S151 Officer), in consultation with the Executive Mayor, Lead Member of Finance, Director of Legal Service and Director of Commercial Investment & Capital to issue letters to current Directors requesting their resignations and to approve indemnification of liability in line with the Outside Bodies Protocol approved by Ethics Committee on 8th February 2023.

1.7.         To delegate to Corporate Director of Resources (S151 Officer), in consultation with the Executive Mayor, Lead Member of Finance, Director of Legal Service and Director of Commercial Investment & Capital to appoint new Directors on the Board of the BBB.