A central London council pressed ahead with awarding multi-million pound contracts to a construction company despite internal warnings it was at risk of 'ultimate supplier failure', an investigation has revealed.
Ignored Warnings and Mounting Losses
Westminster City Council entered into a commercial partnership with Geoffrey Osborne in 2020. In February 2022, a confidential council briefing note, seen by the Local Democracy Reporting Service (LDRS), flagged severe financial risks. The memo stated Osborne had posted a £13.8 million pre-tax loss and suffered a credit score downgrade.
The document revealed the company's finances had deteriorated sharply from a £4.5 million profit just 18 months earlier. Its assets halved in value and cash flow dropped by £10 million. This prompted a major restructure and the sale of its £200 million infrastructure business.
Despite these red flags, the council, then under a newly-elected Labour administration, appointed Osborne in September 2022 to build 64 social homes across three sites: Queen’s Park Court, Adpar Street, and Torridon. Labour councillor Matt Noble, who approved the contracts, claims he was never shown the damning February memo.
Project Failures and Soaring Costs
Geoffrey Osborne went into administration in April 2024, leaving numerous properties across Westminster half-built and unprotected from the elements. The council has since been forced to spend an extra £27.5 million to complete the projects.
This includes £5.67 million specifically to repair water damage and other defects discovered by the new contractor, Willmott Dixon. Inspections found extensive mould, unlevel flooring, incorrect door sizes, and rotting structural frames. Builders also discovered standing water in some townhouses.
The original contract price for the three sites was £41.8 million—£17.9 million more than first quoted. Completion dates have been pushed back from summer 2024 to March 2026.
Political Blame Game and Lasting Impact
The fallout has ignited a fierce political row. Conservative councillor Paul Swaddle accused the Labour administration of a "failure of judgement and competence," wasting millions of taxpayers' money. He demanded the resignation of Labour's David Boothroyd, the other cabinet member who approved the deals.
Councillor Noble defended the council's actions, stating that when Osborne couldn't secure a Performance Bond in early 2023, the council acted "swiftly" by increasing retention fees. He blamed industry-wide turmoil, partly caused by Liz Truss's mini-budget, and "Conservative government incompetence" for the firm's ultimate collapse.
In a statement, Westminster City Council said it followed a "robust process" and that Osborne had successfully delivered previous projects. It acknowledged lessons had been learned and procurement processes strengthened. The unfinished sites are part of the council's 'Infills Programme' to provide affordable housing on existing council land.
