Cllr Paul Fisher

THE city council failed to act on warning signs a major contractor was collapsing after the Covid-19 pandemic, an opposition councillor claimed this week.

West End ward Cllr Paul Fisher – who defected from Labour to the Conservatives in the summer – said the insolvency of Geoffrey Osborne Ltd in April 2024 was “foreseeable”.

The collapse led to delays to major housing projects and the council having to spend several million pounds in hiring a new firm to carry out the works. A memo to the city council’s cabinet – classed as commercially sensitive until it was made public this week – shows how strong warnings were raised with councillors before a new contract was approved.

Cllr Fisher, his party’s finance spokesperson, said: “In September 2022, despite the obvious warnings about the company’s poor financial health, the Labour council proceeded to engage Geoffrey Osborne in respect of three social housing project packages: Adpar Street (Little Venice), Torridon House (Maida Vale) and Queen’s Park Court (Queen’s Park).

“After Geoffrey Os­borne went into administration, the council had to scramble to find an alternative contractor, pledging an ‘additional funding’ of £22million. Willmott Dixon took up the mantle. The council approved £5.6million in variations in September 2025 following evidence of poor performance by Geoffrey Osborne once Willmott Dixon was on site.”

The briefing note memo, in February 2022, reports “several early warnings in relation to financial and operation management” of Geoffrey Osborne Ltd. It said the company had not published its annual accounts on time and that it had announced the company’s scope would be reducing in size.

Other contractors were also facing performance problems due to the pandemic, the report said.

There were questions about a £5million increase in costs for pre-construction work at three sites, at Queen’s Park, Adpar Street and Torridon.

But the memo advised: “The risks identified have not materialised into issues, and therefore, the council should continue to with its current contractual commitments.”

Cllr Fisher said “it was the Labour administration’s duty to interrogate officer recommendations”, but added: “It singularly failed to do so.”

“This was a costly failure for residents in Westminster. It is one that should not be repeated. Elected councillors are duty-bound to consider recommendations by council officers but do not have to act on them.”

Geoffrey Osborne Ltd was founded in Chichester in 1966 alongside the rest of the companies in the Osborne Group. Owing to economic difficulties from inflation and Covid-19, the companies all filed for administration.

At time of administration, the firm owed a total of £25.9million; and it said in a statement: “The decision was reached after an 18-month programme to restructure the firm to focus on the core construction business and following an extensive effort to secure new investment into the business.”

A city council spokesperson said: “The entire building industry faced significant financial challenges in the wake of the pandemic. Geoffrey Osborne Ltd were one of many firms facing difficulties at that time. The council followed a robust process before awarding this contract. Osborne had successfully completed large schemes for Westminster previously, including the initial phase of this project, demonstrating they could deliver on time and on budget. All large development projects carry a risk so when Osborne went bust, at a critical time, the council acted quickly and responsibly in appointing Wilmott Dixon to complete the work and create much-needed council homes in central London.

“Regrettably this carried additional cost. The alternative was leaving half-built council homes across the city. Lessons have been learned.

“We’ve invested in our procurement processes to give the council earlier warning signs and ensure this never happens again.”