The questions council 'must answer' after spending £23m on £10m office
- Credit: Google Streetview / Polly Hancock
Opposition councillors in Haringey have demanded answers to 21 questions about a “disturbing” property deal.
Lib Dem members submitted the questions after the Ham&High reported last week that the council had spent almost £23m on an office block, which they had the chance to buy for £10m months earlier.
Party leader Luke Cawley-Harrison said a “dreadful and incredibly serious failure” had seen millions of pounds of taxpayers’ money wasted.
“It is vital that more details on this transaction are released and heavily scrutinised,” he said.
In May 2019, the council had the opportunity to buy a Wood Green office block called Alexandra House for approximately £10m.
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After it failed to do so, a property billionaire set up a company and secured the option to buy the block, to convert it into flats.
When the council later decided it wanted to buy the building after all, it paid £6m to take over what the Lib Dems called a “worthless shell company”, in order to exercise the company’s option on the building.
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In total, the acquisition cost £22.6million.
Audit company Mazars was called in to investigate.
The council’s Corporate Committee was told the firm had found “weak” governance had enabled a civil servant to turn down the offer without the council’s leader or its chief executive knowing.
But Isidoros Diakides, chairing the committee, said: “It sounds a bit strange that nobody above that particular consultant knew about it.”
A second investigation was ordered into “unanswered questions”, and should conclude by autumn.
But the Lib Dems have submitted their questions as “member enquiries”, meaning they must be answered within 10 working days.
The group has shared the questions with the Ham&High.
When the Ham&High requested a copy of the Mazars report, the council refused to release it and refused to say why.
We have since requested it under Freedom of Information laws – but among the Lib Dems’ enquiries is a demand that the document be turned over to elected members.
They have questioned the depth of both that first audit and the impending second one.
Minesh Jani, the council’s head of audit and risk, said of the Mazars audit last month: “There are three boards that are relevant to this particular acquisition.
“What the auditors noted was that none of the boards’ minutes have any reference to Alexandra House acquisition not going ahead... Through the official manner in which we make decisions, there is no reference.”
Lib Dems want to know how much Mazars charged for this audit and whether the second will be more rigorous.
“Will the audit company be limited to looking at auditable paperwork, or will they be able to question officers?” they have asked.
“Has an internal investigation taken place into the decision not to acquire Alexandra House? If not, why not?”
The Lib Dems are seeking copies of all correspondence sent to or from three senior councillors which includes any mention of Alexandra House.
One is leader Joseph Ejiofor. The second is Charles Adje, current cabinet member for finance and strategic regeneration.
The third is Noah Tucker, who was cabinet member for corporate services and insourcing in spring 2019.
Cllr Tucker told the Ham&High last week that if he had been informed of the opportunity to buy Alexandra House, he would have strongly advocated in favour of doing so.
They have also demanded records of all meetings held in 2018 or 2019 at which Alexandra House was discussed, including the dates, attendees and minutes.
What the council says
A council spokesperson said the authority’s “processes for significant property decisions were not as robust as we would like at the beginning of this process”, but that it had “already implemented a number of improvements”.
It described buying Alexandra House as “a major step forward in our ambition to transform Wood Green town centre” - but said it was not yet decided what it would do with the building.
“The council is and will continue to use Alexandra House for its office accommodation at least until the rejuvenated Civic Centre becomes the council’s headquarters,” it said.
“The decisions as to the role of the building beyond this point will be taken at a later point, in the context of wider planning for that area of Wood Green.”
The Lib Dems’ 21 questions in full
1) Is it correct that all 'significant' decisions involving sums over £100,000, such as the setting up of the shell company relating to Alexandra House, and for the purchase of Alexandra House, must be reported by officers to the relevant cabinet member for them to formally approve?
2) According to the policies in place at the time of decision (believed to be May 2019), who would have the final decision on whether to push ahead with acquiring an asset such as Alexandra House?
3) Can you please provide any documentation relating to the approval of the £6M shell company, and the acquisition of Alexandra House, and the meetings which the approval was granted, including who by?
4) What meetings took place in 2018 and 2019 relating to the acquisition on Alexandra House and of the related shell company?
5) Who was in attendance, and please provide minutes?
6) Is it correct that the decision not to acquire Alexandra House in May 2019 was taken by the then Assistant Director for Economic Development, without consultation with either politicians or other officers at AD level or above?
7) If incorrect, then which officers and politicians were involved and signed off on the decision?
8) If correct, was disciplinary action taken against the officer in question?
9) If not, why not?
10) Has an internal investigation taken place into the decision not to acquire Alexandra House previously?
11) If not, why not?
12) Were any meetings, briefings, calls or other engagements held between then cabinet member Cllr Noah Tucker and officers regarding the acquisition of Alexandra House? If so, please supply times, who attended, and any minutes from these meetings.
13) Were any meetings, briefings, calls or other engagements held between cabinet member Cllr Charles Adje and officers regarding the acquisition of Alexandra House? If so, please supply times, who attended, and any minutes from these meetings.
14) Were any meetings, briefings, calls or other engagements held between council leader Cllr Joe Ejiofor and officers regarding the acquisition of Alexandra House? If so, please supply times, who attended, and any minutes from these meetings.
15) Please supply any correspondence that includes Cllr Tucker, Cllr Adje or Cllr Ejiofor relating to Alexandra House, including, but not limited to, email correspondence (including with officers), meeting meetings, notes, briefings etc.
16) Please supply the internal audit report relating to the decision not to acquire Alexandra House in May 2019.
17) According to the policies in place in May 2019, what burden would there be on senior officers to report the possibility of acquiring Alexandra House, if the opportunity to buy it arose?
18) What other shell companies has the council acquired in the last 4 years, what was the cost of each of these, and what did each acquisition relate to?
19) How much did Mazars charge for its audit on Alexandra House?
20) Given the Corporate Committee has ordered another report on this issue, will Mazars do anything differently the second time around?
21) Will the audit company be limited to looking at auditable paperwork, or will they be able to question officers?