What's Happening?
The City of Westminster has introduced more stringent measures for contractor checks after the collapse of Geoffrey Osborne, a construction firm that went into administration in 2024. The council's Audit
and Performance Committee has adopted robust controls to prevent similar incidents, including enhanced financial due diligence and ongoing contract monitoring. The collapse left 64 new homes incomplete, prompting the council to appoint Willmott Dixon as a replacement contractor. The council aims to avoid reliance on a single contractor and plans to implement larger performance bonds and higher retention levels, although this may impact smaller firms.
Why It's Important?
The collapse of Geoffrey Osborne highlights the risks associated with relying on credit scores alone for assessing contractor stability. The new measures by the City of Westminster aim to mitigate financial risks and ensure project completion, which is crucial for maintaining public trust and safeguarding public funds. The changes could set a precedent for other councils, emphasizing the need for comprehensive financial assessments and proactive contract management. However, the increased financial requirements may pose challenges for smaller contractors, potentially affecting their ability to compete for public contracts.
What's Next?
The council will continue to refine its contractor assessment processes and may face scrutiny from smaller firms affected by the new requirements. The effectiveness of these measures will be evaluated over time, particularly in preventing future contractor insolvencies. Other councils may observe Westminster's approach and consider similar changes to their procurement practices.
