When it came to managing a key contractor the Conservatives set the course and ignored the warning signs – when they were kicked out of office Labour stepped in, acted decisively, and got the projects back on track, with 64 new homes to be delivered in early 2026.
The delivery of new social homes at Adpar (Little Venice), Queens Park Court (Queen’s Park), and Torridon (Maida Vale) unfortunately suffered delays as a result of the insolvency of the previous contractor. Since then, the Council appointed experienced contractors Willmott Dixon to take over the recovery and completion works. This package will next year deliver 64 social rent homes including for those with specialist needs.
It was in 2018, under the previous Conservative administration, where a Strategic Outline Case for this contract was produced and approved.
It was in 2020, under the previous Conservative administration, where the Gate 3 contract award recommendation and endorsement for Geoffrey Osborne PCSA and enabling works was approved. Work then began with Geoffrey Osborne.
In 2021, under the previous Conservative administration, a credit monitoring report flagged up a change in risk of failure from 91 to 72. While a change to 72 shows increased risk, it was still a classification of very low risk of failure. This was noted by Councillor Acton (Conservative), but there was no suggestion at that point of moving away from the contractual relationship with Geoffrey Osborne, or to pause the award of the main works contract.
After the election, when the Conservatives lost control of the council, in September 2022 as in alignment with the trajectory set out under the previous administration, Councillor Noble awarded the Main Works contract to Geoffrey Osborne. Councillor Noble had not been given the credit monitoring report shared with Councillor Acton. The Conservatives had the opportunity to call-in such a decision, given their prior knowledge, but chose not to do so as they didn’t consider the risk sufficient to call it in. The main works then began.
Less than 3 weeks after the September 2022 Cabinet Member decision, Liz Truss’s disastrous mini-budget caused turmoil in the construction industry. In consequence, by January 2023 it became apparent that Geoffrey Osborne could not secure a Performance Bond as expected. The Council acted swiftly, appropriately and proportionately by increasing retention of fees from 3% to 10% to ensure the council was protected against every eventuality. The council continued to monitor the situation, but withdrawing from the contract at this stage would have resulted in high penalties.
Unfortunately, in April 2024, Geoffrey Osborne went into administration and works stopped. The council acted swiftly to secure the sites, and by October 2024 had secured a new contractor, Willmott Dixon, to take over the works. Many other local authorities still have sites unfinished after supplier insolvency in this challenging market, and it was our swift action and negotiating skills which allowed us to secure another contractor to take on the works. This new contract was awarded only after exploring all possible options – including scrapping the schemes or converting all homes to private sector sale – to protect the financial position of the council.
The Conservatives had ample opportunity to scrutinise this decision and chose not to do so. Councillor Paul Fisher was the Chair of the Budget Scrutiny Task Group, Chair of Overview and Scrutiny and Chair of the Housing and Regeneration Policy and Scrutiny Committee and did nothing to bring the issues he apparently knew about to light. Instead of acting in the interest of residents, he chose to opt for political point scoring.
Of course, lessons always have to be learnt. The council has researched additional tools and software that will give a more accurate and up to date indication of financial (in)stability of our suppliers. After a successful pilot, we are now in contract with Dun & Bradstreet, which provides predictive scores for failure and delinquency based on real-time financial data. The results of the most recent reports run on live contracts show no contractors where we have high dependency, having a moderate to high risk of failure.
It was hugely regrettable that Geoffrey Osborne went into administration, not only because of the impact on Westminster’s housebuilding programme, but also because of those people who lost their jobs as a result at a construction company that had traded for nearly 60 years. All unfortunate victims of local and national Conservative incompetence.