Croydon Council mulls wind-down of failing housing company

As of 1 January 2021, Brick by Brick had 29 schemes on site, with 930 homes being built or awaiting disposal, of which 429 homes are likely to be completed by the end of October. The remaining 501 homes are expected to be completed by mid-2023.

However, the report acknowledged that this option would be difficult in terms of cost and value but also the “practicality of keeping the company operational while it goes through what would, in effect, be a managed wind-down”.

The scramble to decide the company’s future follows Croydon Council becoming the second local authority in two decades to issue a Section 114 notice, which bans all no essential spending, due to a £66m budget deficit.

Since it was created in 2016, Brick by Brick has received £200m in development loans from the council but is yet to produce any dividends or returns for the local authority.

Colm Lacey, chief executive Brick By Brick, said: “The cabinet report highlights that the council, as shareholder and funder of Brick By Brick, is no longer in a position to fund the company in the manner envisaged in our 2020 business plan due to its current financial circumstances. For this reason, the report recommends that the council elect not to progress a set of sites which were due to be developed by Brick By Brick.

“It also recommends that Brick By Brick continue to develop out a range of sites which are currently in contract to completion. At the same time, the council will explore the sale of the whole business to a third party, in which they have received interest. Brick By Brick will continue to assist the council to explore and enable these options.”