Senior councillors knew of chance to buy office block for £12m less than they paid
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Leaked documents have contradicted a former cabinet member’s version of events about how a council paid almost £23m for an office block valued at around £10m.
Questions were raised about the “disturbing” deal last month, after an auditor found Haringey Council had paid £22.6m for Alexandra House, on Station Road in Wood Green - months after turning down the chance to buy it for up to £12m less.
Earlier this month, the council blamed an ex- employee for the decision to not buy the block in May 2019 for far less than it ended up paying for it in April 2020.
Minesh Jani, the council's head of audit and risk, said: "neither the chief executive nor the leader were aware (of the decision to not buy it)".
When the Ham&High approached Noah Tucker – cabinet member for insourcing at the time of the decision – he also said he had not known about the chance to purchase the block.
“If I had been informed of the opportunity to buy Alexandra House on good or reasonable terms while I was the relevant cabinet member, I would have very strongly advocated purchasing the building,” he said.
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But the Ham&High has seen paperwork from a meeting of the council’s Strategic Property Board on December 11, 2018, whose agenda included the opportunity to buy Alexandra House.
It stated: “Additional ideas now being considered include: Acquisition of leased properties, including Alexandra House... This is part of a discussion with Workspace (the owners)... Current estimates are between £10m and £14m.”
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Attendees included leader Joseph Ejiofor, chief executive Zina Etheridge and cabinet members Noah Tucker, Charles Adje and Patrick Berryman.
Cllr Berryman – cabinet member for finance at the time – said he still had his papers from the meeting, with handwritten annotations.
He also had notes from an internal Cabinet meeting a month later, on January 8, 2019, showing senior councillors had again discussed “buying Alex House”.
“I was in favour of the purchase, since we already occupied it as a tenant and, as a council with a goal to insource, would likely be growing our workforce,” he said.
Opposition leader Luke Cawley-Harrison said the new information raised questions about Cllr Tucker’s previous statement.
Cllr Tucker was suspended from the Labour Party last month over allegations of anti-Semitism, which he has denied, but remains a councillor for St Ann’s ward. He did not respond to requests for comment.
Cllr Cawley-Harrison said the new details also raised questions about the thoroughness of an audit investigation.
Accountancy firm Mazars was asked to investigate the decision not to purchase Alexandra House, as it set in motion a chain of events which cost taxpayers millions of pounds.
After Haringey turned down the chance to buy it, a property tycoon set up a shell company, used it to acquire the option to buy Alexandra House and submitted plans to convert it into flats.
When the council decided it wanted Alexandra House after all, it had to buy the shell company for £6m.
The council refused to release the Mazars report, instead presenting its own brief summary to the Corporate Committee last month.
Members were told by Mr Jani that “weak” governance had enabled a civil servant to turn down Alexandra House without any paper trail.
But the summary never mentioned senior councillors attending meetings before May 2019 where buying Alexandra House was discussed.
“I would have thought that would be part of a thorough paper trail – that a discussion had already taken place about the purchase of the property,” Cllr Cawley-Harrison said.
The council said that at the December 2018 meeting, buying Alexandra House “was only presented as an option" and was never followed up.
“As the report to Corporate Committee made clear, there was no business case taken through to the council’s property governance meetings... and no decision was sought from the council’s most senior leadership,” a spokesperson said.
They added: "Members and senior officers were not made aware that Alexandra House was available for sale at the time."
Cllr Berryman quit the cabinet before May 2019, but now sits on the Corporate Committee.
He is suspended from Labour over an allegation of Islamophobia, which he has denied.
“Seeing the figures for the first time from the audit, I was shocked,” he said. “It was so much more than when it was first presented to me as a cabinet member.
“With my Corporate Committee hat on, taxpayers have not got the value for money that we should be striving for.”
December 11, 2018 – Haringey's Strategic Property Board hears of negotiations to buy Alexandra House.
January 8, 2019 – Cabinet discusses “buying Alex House”.
May 2019 – Owner Workspace is told Haringey Council doesn’t want Alexandra House.
August 8, 2019 – Property tycoon Andreas Panayiotou opens a company which secures the option on the block.
October 24, 2019 – He seeks permission to turn it into flats.
December 12, 2019 – Haringey refuses permission.
February 11, 2020 – Haringey’s plan to vacate Alexandra House is abandoned. It decides it still needs the offices, creating “a much stronger argument for acquisition”.
March 5, 2020 – Haringey takes over Mr Panayiotou’s company.
April 15, 2020 – It buys Alexandra House.
March 10, 2021 – Auditors reveal Alexandra House cost £22.6million, but is only worth £10.1million.
March 17, 2021 – Corporate Committee hears auditor Mazars found a civil servant turned down Alexandra House in May 2019 without senior figures knowing.
March 29, 2021 – Ham&High asks for Mazars’ report. Haringey won’t release it.
April 9, 2021 – Lib Dems file 21 “vital” questions.
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