Croydon appoints two board members to oversee wind-down of Brick By Brick

The council decided to wind down Brick By Brick in July 2021 after falling into significant financial difficulty.

In November 2020 Croydon became the second local authority in two decades to issue a Section 114 notice, which bans all non-essential spending, due to a £66m budget deficit.

The company, which was launched in 2016, received £200m in development loans from the council but failed to produce any dividends or returns for the local authority.

Later that month, the council removed Brick By Brick’s chief executive Colm Lacey and its chair Martyn Evans from the company’s board.

They were replaced by people with financial backgrounds: Duncan Whitfield, strategic director of finance and governance of Southwark Council, and financial consultant Ian O’Donnell.

Developer Urban Splash put in a bid for the company after the Section 114 notice was issued, but it emerged in July that the council intended to reject it and was planning to wind down Brick By Brick instead. 

While the council said the wind-down option came with a higher degree of risk, it said it was also likely to cost the council less in terms of the portion of outstanding loans to Brick By Brick that it would need to write off.

According to a council report at the time, the local authority would only have to write off between £26.6m and £52.7m as a result of the wind-down option, compared with between £54m and £68.4m if it sells the business.