Croydon council have won a national housing award – but it’s not the sort ANY council would ever want to win.
It’s been given to Croydon by Private Eye magazine as one of their Rotten Boroughs 2019 awards.*
The citation reads: HOUSING CHAMPIONS
Labour Croydon council sold 24 pieces of building land at “mates rates” to its own housing company, Brick by Brick. Four sites were sold for £10,000 – way below market value – and six were sold for just £1 each. The idea is that BxB profits from building homes which are sold at market rates, and ploughs those profits back into building homes for “social” rent. While BxB has built numerous expensive “executive” style homes and flats, the number of homes for social rent completed totals just three one-bed flats.
*Croydon only won one award. Another award – unconnected to Croydon – mentions a former chief executive Nathan Elvery. Harrogate council won TWO awards including communications team of the year. Full details in this week’s issue of Private Eye with another Trump cover.
Croydon council replied on January 22nd: A council spokesman said: “The land valuations for Brick By Brick’s first two tranches of sites include an agreement where they pay the council for any rise in land value once the housing is sold.
“Brick By Brick is set to complete on several sites in 2020, and the money the council receives as a result will be ploughed back into providing more good-quality homes for local people on our waiting list.”
News From Crystal Palace has previously covered this:
CROYDON COUNCIL SELLING OFF PARCELS OF LAND FOR JUST ONE POUND EACH – TO ITS OWN COMPANY (and it’s all, apparently, perfectly legal…..) dated 29th May 2019 which reads as follows:
Croydon council have been selling off parcels of land in the borough to the development company they own – Brick by Brick – for just ONE POUND each.
The sites sold for one pound include land west of 83, 85 and 113 Hermitage Road, Upper Norwood.
Garages south of Eagle Hill were sold for £210 while “land adjacent 2 Harold Road and Ravensdale Gardens” near the Beulah Spa was sold for just £250.*
Freedom of Information requests made by Steven Downes from the Inside Croydon website also reveal that their FOI request was delayed because the council’s press office asked its Freedom of Information team to clarify a response. But a spokeswoman for the Information Commissioner’s Office told News From Crystal Palace: “The Freedom of Information Act doesn’t prohibit public authorities to consult with press office, or other service areas, when responding to an FOIA request.”
A council document states that all the SE19 sales are of “surplus land for housing development offering circa 50 per cent affordable housing” and that “valuations were undertaken by an in house valuer and external consultants and final figure agreed direct with the developer.”
News From Crystal Palace asked Croydon council’s press office:
- Is there any comment from Croydon regarding the final item on the ‘Rotten Boroughs’ page 16 of Private Eye number 1495 relating to sales of land by Croydon council to Brick by Brick?
- In the wake of reading the emails between Steven Downes and Croydon, is there any comment from the council on Mr Downes assertion in his email of 28 February 2019 that his information request “was being deliberately delayed by the council press office.”
- Is it a normal practice for FOI requests to go to the press office? If so, how many and for how long has this been going on?
- Having looked at the spreadsheet it shows several sites being sold for just £1 and “land adjacent 2 Harold Road and Ravensdale Gardens” for £250.
- Why have the council sold land for just one pound to the developer, in this case Brick by Brick?
- Please could you also tell me what is specifically meant by “land adjacent 2 Harold Road and Ravensdale Gardens” as there are three sites in that vicinity (one on the left as you go into Ravensdale Gardens, a site at the back on the right, and the multi-storey building being put up opposite the Beulah Spa.)
- All the SE19 sites state “sale of surplus land for housing development offering circa 50 per cent affordable housing.” This does not appear to be the case. Is there any council explanation for this?
A Croydon council spokesman told News From Crystal Palace:
The way the council addresses Freedom of Information requests is available on our website here. The council press office is informed of departments’ FOI requests submitted by journalists so they are aware of background in case they approach for formal comment.
When the council sells land, if it rises in value through being developed and sold within a certain time we are repaid a percentage of that rise. This applies to Brick by Brick, with the percentage in these cases being 100 per cent of the increase in value.
On the Auckland and Ravensdale sites in Crystal Palace / Upper Norwood, there are several units interspersed with existing developments on this land. The affordable rate is taken as an average across all homes in this tranche, and not individual sites. For example, some, like Flora Court, are 100 pc affordable.
A Brick by Brick spokeswoman told News From Crystal Palace:
The sites that we acquire are small and often challenging and would often not be developed by traditional developers. Equally other developers wouldn’t tend to deliver as much affordable housing on these sites as we do.
The initial land price we pay may reflect this, but, unlike other developers, at the end of every scheme we also undertake a revaluation process which calculates the final land value. This means that if we make more revenue from the project than we thought we would, this is always added to the land price.
In this way, we ensure that the price we pay is always the true market value.
As well as land value, any development profit we make is returned to the council in the form of a dividend which means it can be used to fund council services, including enabling more housing for people in need on the council’s housing waiting list.
News From Crystal Palace also asked Brick by Brick: “Where would I find ‘Help to Buy’ info on the Brick by Brick website please?”
Reply: You can find what you need to know here – https://bxbdevelopment.com/helping-you-to-buy/
A Ministry of Housing Communities and Local Government spokesman told News From Crystal Palace:
“Public bodies should generally sell surplus land at the best possible price reasonably obtainable. “However, the Government recognises that selling land at less than market value can sometimes create wider public benefits.
“For example, to help support local community initiatives and facilitate regeneration projects that deliver new housing, including the provision of affordable housing.
“A general consent issued under section 123 of the Local Government Act 1972 allows local authorities to sell land held for purposes other than housing or planning at an undervalue of less than £2 million without seeking a specific consent from the Secretary of State where they consider it will help secure improvement of the economic, social or environmental well-being of the area.
“Specific Secretary of State consent is required for sales of such land at an undervalue of more than £2 million.
“Specific Secretary of State consent is required for sales of land held for planning purposes regardless of the sale value.
“MHCLG has no oversight of Freedom of Information requests to local authorities.”
*Elsewhere in SE19 land “adjacent Auckland Rise, Church Road and Sylvan Hill” went for £1,327,071 and land north of 20 – 20c Oxford Road went for £675,889.
Further reading: BRICK BY BRICK? NO THANKS – MORE LIKE ‘ENOUGH IS ENOUGH’ December 5th 2019