Anger as second audit into £23m 'Mary Celeste' office block is delayed

Inside Alexandra House

Photographs from inside Alexandra House show entire floors with no staff or office furniture. - Credit: Archant

Photographs show an office block which cost Haringey Council £23million is barely being used at present, councillors said.

The council bought Alexandra House in March 2020 for twice its value, saying it needed extra office space.

The transaction occurred four days after the UK was plunged into its first coronavirus lockdown.

But new images, captured weeks after all Covid-19 restrictions were lifted, show entire floors with no staff working on them.

Labour sources, who asked not to be named, said the images show the Wood Green block is “a massive white elephant”.

“It looks like the Mary Celeste in there,” said one. “I can’t understand why we bought it.”

The Ham&High is publishing the photographs – taken during office hours on a work day within the last month – days after it was revealed that an investigation into the purchase, ordered by councillors six months ago, has still not even begun.

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Lib Dem leader Luke Cawley-Harrison said: “This dragging of heels indicates that there is something they don’t want people to find out.”

An auditor valued Alexandra House at £10m. Haringey Council later bought it for £22.6m

An auditor valued Alexandra House at £10m. Haringey Council later bought it for £22.6m - Credit: Google

The Back Story

Earlier this year, we reported that Haringey Council had missed the opportunity to buy Alexandra House for around £15million.

A billionaire property tycoon then set up a shell company and used it to secure the option on the building, only for the council to decide it wanted it after all.

It ended up paying £6million for what councillors called a “worthless” shell company, in order to exercise its option on the building.

The total purchase price was nearly £23million.

An auditor then valued it at just over £10million.

Alexandra House

A Benefits and Business Support office at Alexandra House had no staff in it at all. - Credit: Archant

The Audits

An audit ordered by the council’s Corporate Committee last year came back in spring.

The report, by accountancy firm Mazars, said the decision to turn down the building initially appeared to have been made by an officer who had since left – but that there was no paper trail to corroborate that story.

Councillors were never given the full Mazars report, instead receiving an officer’s summary.

They said the audit left “unanswered questions” and ordered a second audit, this time scrutinising the decision-making which led the council to purchase it at the vastly inflated price.

But when committee chairman Peter Mitchell delivered an update at a meeting last Thursday (September 9), he said: “The director of finance has advised that officers are presently considering the appropriate next steps."

A Labour councillor told the Ham&High: “Officer have been told to start the audit and they should just get on with it. We need to know what happened here.”

Alexandra House

Another floor in Alexandra House appeared to be completely deserted. - Credit: Archant

The Secret Meeting

In the meantime, Cllr Mitchell said, the corporate committee would be allowed, at a meeting in November, to read the full Mazars report and some secret documents given to cabinet members in 2020, outlining the “business case” for buying Alexandra House.

However, he said this would be in an “exempt” part of the meeting – meaning the press and public would be banned from reading the files or hearing the discussion.

Cllr Cawley-Harrison questioned that decision, saying the Mazars report has already been published under Freedom of Information laws.

He also questioned whether there could remain any commercial sensitivity about a deal which happened two years ago.

“This is a deal that’s already been done,” he said. “Half the details are already out there. If the council can’t face its own scrutiny, it doesn’t really say much for the organisation. It should absolutely be publicly scrutinised.”

Asked why the discussion over Alexandra House would be held behind closed doors, Cllr Mitchell said it was recommended by officers.

“The initial advice was that it would be in part two,” he said. “I guess we will take advice when we get nearer to finalising the agenda for that meeting.”

Haringey Lib Dem leader Luke Cawley-Harrison

Lib Dem leader Luke Cawley-Harrison called for more transparency over the Alexandra House deal. - Credit: Haringey Lib Dems

The Council

A council spokesperson said a "large number" of staff are working from home amid the pandemic and some floors in Alexandra House are being refurbished "to modernise the building and ensure our staff can work as productively as possible in future".

“With the closure of the Civic Centre, Alexandra House will provide the majority of our office accommodation for the medium term and will be crucial to staff serving the residents of Haringey," they added.

“Corporate committee is responsible for the matters of audit and corporate governance. If any concerns are raised the council will respond at the appropriate time.”

For more, read:

Probe into £23m property deal is like 'a vendetta', says ex-deputy leader

Council missed chance to save millions on office block, report confirms