What happened
Adur District Council reported a 60% increase in the overall cost for its Albion Street housing development in Southwick, West Sussex. The project cost now stands at £19.6m, compared to the original £12.2m budget. The increase follows the collapse of main contractor Westridge Construction in September 2023 and the uncovering of substantial construction defects. Replacement contractor Cheesmur took over in December 2023.
On restart, Cheesmur found the scheme—around 90% complete—had multiple issues not previously identified. According to the council, these included incomplete and faulty cladding, which had allowed water into about half of the 49 flats. Further investigation identified more examples of poor construction, including incomplete insulation and defective cavity trays. Additionally, the foul drainage connection running beneath the A259 had not been finished. Specialist tunnelling and partial road closure were needed to complete this work.
Remediation covers several areas. Feature columns allowing damp ingress are being removed. Sea-facing brickwork is being replaced with materials designed to resist rain penetration. Southern balconies are being rebuilt as stand-alone structures. The interior damage caused by water leaks required significant repair, including extensive condensation issues and the replacement of wet building elements.
The background
Westridge Construction, based in East Sussex, began the seafront housing scheme in March 2021. The company entered administration in September 2023, citing factors such as inflation, a fixed-price contract, and issues in its supply chain. At the time of Westridge's collapse, the project was significantly advanced but incomplete.
Westridge had reported an annual turnover of £64m in its financial year to February 2022. After entering administration, the company was put into liquidation in October 2025. Unsecured creditors received a return of 12.76p for every pound owed.
Following Westridge’s administration, the council was unable to take legal action against any subcontractors, as its contractual agreement was directly with Westridge. Recovery of costs was limited to the insolvency insurance bond. The council successfully claimed £997,830 from this bond.
The council confirmed that the entire cost overrun is being met from its Housing Revenue Account. It also retained a £2.4m grant from Homes England, which had been earmarked for the project.
What people are saying
According to the council, “serious hidden defects” were found after contractor handover. These included substandard construction, faulty cladding, and incomplete drainage systems. Council leader Jeremy Gardner publicly expressed concern about delays, highlighting that tenants remain unable to move in.
The council noted that the building must be fully signed off as finished, structurally sound, and safe before any new residents can take possession. It stated no compensation would be due to prospective tenants for delayed occupation, consistent with standard local authority housing rules.
A formal “lessons learned” review is underway within the council. Findings from this investigation will be used to tighten risk management and oversight procedures for future large-scale developments.
What happens next
Remedial works are ongoing at the Albion Street site. There is no confirmed completion date, but the council indicates that first tenancies will not be offered until the building receives full statutory and safety signoff.
The council has also initiated a review into project procedures. This aims to identify shortcomings and implement corrective measures for future construction programmes. The local authority said these steps are intended to increase resilience to contractor failure and improve oversight of construction quality on council-led housing schemes.
Financially, the council continues to bear the overspend, with no plans for further external funding beyond the insurance recovery and existing Homes England grant. It confirmed the focus remains on completing the flats to a safe, habitable standard and reviewing procurement and contract management practice across the authority.