News from Croydon Labour

Croydon Tories push through secret £145m funding deal

The Croydon Guardian revealed this week the level of bailout that the Croydon Tories have handed to the private firm that is behind the new luxury HQ.

£145million is to be handed over to the ‘CCURV’ a joint company with construction company Laing. This is because the private markets refused to lend to the joint company at viable interest rates.

The incompetent Tories have now propped up this joint company with £145million of taxpayer cash. If they were being sensible they would now scrap the joint deal and instead revert to a traditional model of building. This is a perfect time to scrap the project and save money.

They now have a ‘half cow half pig’ that is on life support provided by Croydon Council. All the risk has been transferred to the Council.

The private partner keeps the build contract and half the profit from the development. Profit paid for by the taxpayer in subsidised loans to the tune of £145million.

The original joint company was meant to provide private sector expertise and public sector land and buildings to provide a new council HQ and other buildings as part of a £450million development scheme. It was meant to transfer development risk and access private sector funding. The company was meant to split ‘profit’ with the council. 50% to the developer and 50% to the council.

The Tory council now propose that the joint company is funded by the council tax payer borrowing £145million at preferential rates. The Tories have also agreed to transfer all of the risk to the council tax payer.

The Council has NOT even got to financial close and yet they have started to vacate offices. The Tory council agreed to a £100,000 a week penalty with the Joint Company if it failed to vacate the offices on time. Utility diversion works have also started.

The decision was taken at a ’secret’ meeting of Croydon Cabinet. Despite spending £145million the Council have not made this a ‘Key Decision’. This means that it CAN NOT be looked at by Scrutiny Committee or by Full Council.

It has now become clear that at a non executive Committee meeting in July approved a paper that allowed the director of finance to technically switch the way that funding for the ‘joint company’ was funded. It did not specify any amount or any detail.

This raises the question: When did the Councils political leadership or senior officials first realise that John Laing were incapable of raising any money for the project and when was the decision to use tax payers’ money taken.

Councillor Tony Newman, Leader of the Labour Opposition on Croydon Council said:
“This is the most serious financial issue to engulf Croydon Council for a generation. It is clear that both councillors and the public have been misled. Unprecedented sums of their money as taxpayers are proposed to be spent by the current Tory administration. I am today writing personally to the district auditor to ask that they begin an urgent investigation.”