Hackney Council is to pay up to £30m to restart work on the final phase of a major Shoreditch regeneration scheme – with the homes now not due to be finished until late 2027, a year later than planned.
The last phase of the Britannia Masterplan ground to a halt in June when the council’s main contractor, Ardmore Construction Group Ltd, entered administration. Phase 2b had been slated for completion in late 2026. The new contract sets a practical completion date of 23 November 2027.
The council warned in July that the cost of the phase was likely to exceed its approved budget of £196.9m.
The scheme will deliver 371 homes at the site in Hoxton.
On Monday 2 November the council’s Cabinet Procurement and Insourcing Committee approved a contract worth up to £30.1m including VAT (£25.1m excluding VAT) for Wates Construction Ltd to complete the “urgent” next stage of works to the buildings’ exterior shells.
Wates took over the site on 30 June and has since been working under a bespoke pre-construction agreement to draw up a “recovery plan”. The firm was appointed directly, without a competitive tender, using a clause in the Notting Hill Genesis contractors’ framework that allows direct selection “for reasons of urgency”.
‘Not watertight’
The contract covers making the four buildings watertight, buying critical construction materials and long-lead items, and continued site management.
Although the two towers – of 25 and 20 storeys – may look close to finished, the council says none of the four blocks were watertight when Ardmore walked off the site. Their facades remain open where construction hoists are fixed to the buildings. Three of the four blocks are classed as higher-risk buildings under the Building Safety Act 2022.
Cllr Alastair Binnie-Lubbock, Cabinet Member for Regeneration, Planning and Inclusive Neighbourhoods, said the council was taking a “phased” approach, with work packages for the internals and landscaping still being assessed and re-procured. These will be covered by a second contract, subsuming the first, which is expected to go to the committee for sign-off in spring 2027.
Council directors said the phased approach reflected “the complexity of stepping into a construction project which was near to completion”.
In the report, Cllr Binnie-Lubbock said: “As a council, our priority is to act swiftly and confidently to minimise the financial impact of this on the Council and to give clarity to project stakeholders on the plan to complete the project.”
Council takes on the risk
Ardmore was originally hired on a fixed-price “design and build” contract. Wates’ contract is instead a “prime cost” deal, under which the council pays the contractor’s costs plus a fee – and the council keeps the risk for any problems with the work Ardmore has already done.
Officers say spending to put right defects and to test work that has not yet been certified is “highly likely”. The £30.1m figure is a maximum, including contingency held by the council and 2.5% headroom for extra work.
The council hopes to claw back costs through a 10% performance bond and a parent company guarantee from Ardmore Group Ltd. But those losses must be incurred before they can be claimed, and the council admits its final exposure may not be settled until the end of the defects period.
Rickardo Hyatt, Executive Director of Housing, Climate and Economy, and Naeem Ahmed, Executive Director of Finance, said restarting work as quickly as possible was “fundamental to mitigating the risk of further losses”.
Ardmore’s collapse
Ardmore’s construction businesses entered administration on 11 June, two months after the High Court made a £14.9m building liability order against Ardmore group companies over cladding defects at Admiralty Quarter in Portsmouth, a development completed in 2009. The order, brought by housebuilder Crest Nicholson, extended liability to companies across the group. The council terminated its contract with Ardmore on 2 July.
When Ardmore left the site, officers estimated the homes were six to nine months from completion. But because work stopped at such an advanced stage, the council says “a considerable amount of assessment and due diligence” is now needed to establish the state of the buildings before they can be finished.
Budget ‘likely to exceed’ £196.9m
When it was first approved in 2018, the entire Britannia Masterplan was estimated at £384m. Phase 2b was initially estimated to cost £153.9m when it was signed off in 2023.
In July, the council warned the cost of the phase was likely to exceed its approved budget of £196.9m. Cabinet signed off revised funding requirements at the same meeting, but the figure has been kept in a confidential appendix.
In September, the council cut its 2026/27 capital spending programme by around £100m, from £602.4m to £501.7m, pushing £288.5m of spending into future years. Britannia was among the stalled projects cited. The deferrals included about £34.75m for the council’s mixed-use developments, most of it relating to Britannia, and £18.2m for the council’s purchase of the scheme’s affordable homes, which has now slipped to 2027/28.
Apprentices and private sales
Ardmore had committed to providing 77 apprenticeships over the course of the build, but only 21 apprentices were working on the project when it collapsed. Wates has committed to ten apprentices, and is working with Hackney Works to find those whose apprenticeships were cut short by Ardmore’s administration.
The 290 homes for private sale are meant to cross-subsidise the scheme. The council has written to buyers who exchanged on flats off-plan to update them on the delay, and says it is exploring how to reduce the risk to its sales income. Its assessment of the sales position has been kept confidential.
Knock-on for Colville
The final phase will deliver 51 social rent homes and 30 shared ownership properties. The remaining 290 flats will be for sale at market rate, which Cllr Binnie-Lubbock said “was intended to help provide the leisure centre, affordable housing and new school”.
The social rent homes will be used to rehouse 51 households from the Colville Estate, whose life-expired homes are being demolished as part of a separate regeneration programme. The council says moving them is vital to unlocking the next phase of the Colville scheme, which will deliver 175 social rent homes.
Development of the Britannia Masterplan began in 2016. So far it has seen the redevelopment of 3.2 hectares of council-owned land into a new leisure centre, the City of London Academy Shoreditch Park secondary school and new public spaces including BRAFA Square.
With additional reporting by Hackney Citizen.
Find out more on these topics
