Croydon Council: Fraud probe launched into £67.5m bill

A report on Croydon Council failings over the Fairfield Halls refurbishment has been passed to the police.

An internal fraud probe has also been launched to investigate the latest in a string of losses, contributing to the council's £1.5bn debt.

Independent auditors have already found "financial and legal failings" in the revamp of the music venue.

Croydon Council says recent actions mean such failings "could not happen now".

The audit report has been passed to Metropolitan Police south borough commander Ch Insp Dave Stringer, who covers Croydon, for review and advice on the next steps as the council continues its own internal fraud probe.

A Met Police spokesman said the force had not yet received any specific allegation but did not rule out an investigation in future.

He said: "We are aware of the publicly available RIPI (report in the public interest) report in relation to Fairfield Halls - no allegations of fraud have been received and there is no police investigation at this time."

Housing Secretary Michael Gove is also standing by to intervene "should the council fail to make the necessary improvements", a Department for Levelling Up, Housing and Communities spokesman confirmed.

He added: "Taxpayers and residents have been badly let down by Croydon Council's financial mismanagement and we are aware of the serious concerns raised in [auditor] Grant Thornton's report."

The venue, where rock stars including the Beatles and Queen have performed, was shut between 2016 and 2019 for a revamp originally costed at £30m, with funds to be recouped from the sale of 421 homes to be built on land next door.

The council loaned developer Brick by Brick money for the refurbishment, but the house-building project was scrapped, leaving taxpayers to foot the massive bill.

Grant Thornton found paperwork for loans given to council-owned developer Brick by Brick was missing, and there was "no evidence" of the company's credentials as a property developer.

The auditors found the chief executive and senior council officers repeatedly failed in their statutory duties.

The report also states: "While the then Leader and then Portfolio Holder for Finance and Resources have contended that there were appropriate protections and financial controls in place at all times for the funds, without properly executed written loan agreements the Council's legal position is at best open to challenge."

That audit report has now been passed to the Metropolitan Police, and the council's new monitoring officer, John Jones, has also formally launched a review into whether fraud had taken place.

At an extraordinary meeting of the council called to discuss the audit report, he said: "I'm advising council that I've asked that the content of the external auditor report be reviewed to identify any concerns or areas that need further consideration from a fraud perspective, in accordance with the Fraud Act."

Council leader Hamida Ali, Labour, was contacted for comment on the fraud probe but had not responded at the time of publication.

A Croydon Council spokeswoman said no further information about how the internal investigation would be carried out or when it would report was available, but insisted an action plan was under way and the council's own auditors believed "considerable improvements" had been made since the Fairfield fiasco.

Councillor Jason Perry, leader of the Conservative group, which was in opposition during the time of the project, welcomed the fraud probe.

He said: "The residents of Croydon have a right to feel that those responsible for what has happened are properly held to account."

Councillor Andrew Pelling, Labour, suggested forensic accountants, rather than police, should investigate to "chase down the missing millions", although there are no allegations that funds have been misappropriated.

He added: "Sending the report across the road to the local Borough Command risks the police just saying there is not enough for them to go on."

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