49 empty council flats, millions spent and a £700,000 interest bill: what has gone wrong at Albion Street?

Five years after construction began on new council homes in Southwick, major rebuilding work is under way. Council records now raise questions about the cost of the development, almost £700,000 in capitalised interest and why it was reported as completed while the homes remained unoccupied.

Forty-nine council flats in Southwick remain unavailable to tenants more than five years after construction began, with Adur District Council now facing millions of pounds of further costs to make them habitable.

The Albion Street development was intended to provide 25 one-bedroom and 24 two-bedroom council homes for people on Adur’s housing waiting list.

Work started in March 2021.

The council says the scheme received a £2.4 million Homes England grant, with additional funding coming from developer contributions and Right to Buy receipts.

But the project has since passed through the collapse of its original contractor, the appointment of a replacement contractor, repeated delays, water penetration, construction defects and significant weatherproofing and design problems.

And council financial records now raise another question:

What will each of the 49 flats ultimately have cost?

More than £9m paid to original contractor

Adur’s published payments-to-suppliers data has been analysed across the construction period.

After duplicate records were removed and supplier-name variations and accounting entries reconciled, the records show £9,184,951.94 paid to Westridge Construction.

The payments run from March 2021 until 6 September 2023.

Nine days later, Westridge entered administration.

That £9.18 million figure requires an important qualification.

The council’s published payment records identify Westridge as the supplier but do not provide sufficient project-level information to prove that every payment was for Albion Street.

It should therefore not be described as the verified Westridge cost of Albion Street.

But the timing closely overlaps the construction period, while Adur’s audited 2021/22 accounts separately confirm that the contract to build 49 homes at Albion Street had been let and the contractor was on site.

The missing document is crucial: the original Westridge contract award and final contract value.

Without it, the public still cannot readily reconcile the council’s supplier payments against the original price of the development.

A second contractor

After Westridge collapsed, Sussex contractor J Cheesmur and Sons was appointed to complete the development.

This investigation has also analysed Adur’s payments to Cheesmur.

They demonstrate why supplier expenditure cannot simply be labelled as Albion Street expenditure: Cheesmur was receiving substantial sums from Adur for other council work as well.

The safer figure is therefore the council’s recorded Albion Street completion contract rather than Cheesmur’s total supplier payments.

That contract was £1,739,438 excluding VAT.

The council says Cheesmur inherited incomplete cladding, water damage and other poor construction work following Westridge’s collapse.

But the financial story did not end there.

Another £994,411

In July 2024, councillors approved an additional £994,411 after the estimated cost of completing Albion Street increased following Westridge’s insolvency.

The money was to be found within the housing capital programme, including unused budgets and projected underspends elsewhere.

Then, in October 2025, the council announced that it needed to invest another £1.1 million in the project.

It cited incomplete cladding, water damage, poor construction work and complications arising from Building Safety Act requirements following the loss of the original contractor.

The council hoped the first tenants would move in early in 2026.

They did not.

‘Completed’ in March 2025

One council document makes what is now one of the most important statements in the Albion Street paper trail.

Adur’s Housing Delivery Test Action Plan, published in June 2025, reported:

“Development was completed in March 2025 and a phased occupation is underway.”

That statement is difficult to reconcile with what followed.

By February 2026, the council was reporting further cladding problems and water damage.

By July, investigations had uncovered significant problems with the development’s weatherproofing and design.

The council said some design features were directing rainwater into flats, damp-course systems were faulty and unsuitable materials had allowed excessive moisture into the building.

Dozens of flats were at risk of serious damp problems.

Nobody could move in.

The council estimated that more than £3 million could be required to put the problems right.

Its current project page says the remedial plan involves removing feature columns, replacing balconies and south-facing brickwork, improving weatherproofing and repairing and redecorating water-damaged flats.

£3.2m more

A July 2026 council report subsequently put the estimated additional cost at approximately £3.2 million.

That included approximately:

£2.1 million — construction

£400,000 — professional costs

£700,000 — capitalised interest

The £3.2 million is an estimate of additional costs. It should not be described as the total cost of Albion Street.

But the £700,000 interest figure creates another significant line of inquiry.

Council records also refer to £698,000 of capitalised interest within expenditure in the preceding financial year.

It is therefore essential to establish whether the £698,000 and £700,000 figures represent different periods of interest or whether they overlap.

If they are separate, they amount to almost £1.4 million.

Across 49 flats, that would be approximately £28,500 per home in capitalised interest alone.

The council should therefore explain:

What interest rate has been applied to Albion Street?

What borrowing or financing is generating the interest?

On what principal sum is it being calculated?

When did the interest start accruing?

Who approved the borrowing and financing arrangements?

Do the £698,000 and £700,000 figures overlap?

And perhaps most importantly:

How much additional interest is accumulating while the 49 homes remain unavailable?

So what has each flat cost?

There is not yet enough public information to give a defensible final figure.

But an indicative calculation demonstrates why obtaining the complete project accounts now matters.

Take three figures:

£9.185m — Westridge supplier payments identified in Adur’s published expenditure data.

£1.739m — the recorded Cheesmur completion contract.

£3.2m — the council’s current additional-cost estimate.

Together they come to approximately:

£14.1 million

Divided by the 49 new flats, that is approximately:

£288,000 per flat

But £288,000 is not being presented as the verified final cost per home.

There are important reasons.

Not every payment to Westridge has yet been project-coded to Albion Street.

Some later council funding approvals, expenditure figures and forecasts may overlap.

VAT treatment may differ between figures.

There were demolition, design, professional and enabling costs associated with the development which may not all be captured by this simple calculation.

And external funding and recoveries must be separated from gross expenditure.

The council secured £2.4 million from Homes England, as well as developer contributions and Right to Buy receipts.

There is also an anticipated recovery under Westridge’s performance bond.

Until that money is shown as received, however, an anticipated recovery should not be deducted from the public cost as though it were cash already recovered.

So the council should publish two figures:

the complete gross cost of Albion Street;

and

the net cost to Adur after grants, developer contributions, Right to Buy receipts and money actually recovered from the performance bond.

It should then be possible to calculate an authoritative cost per flat.

There is another cost

Construction expenditure is not the only financial consequence of delay.

Forty-nine council properties which were built specifically for people on the housing waiting list have remained unavailable.

That raises another question which does not appear to have been publicly quantified:

How much rental income has Adur lost while the flats have remained empty?

That loss is separate from construction costs and capitalised interest.

If the homes could otherwise have been occupied, it represents another economic consequence of the delay.

What was actually signed off?

The March 2025 statement that development had been completed and phased occupation was under way now requires explanation.

What did “completed” mean?

Had practical completion been certified?

Had building-control approval been obtained?

What defects were known at that point?

What did the Clerk of Works report?

What inspections had taken place?

Who certified the work?

Were the water-ingress problems already apparent?

And if phased occupation was genuinely under way, did anybody actually occupy one of the 49 new flats?

These are answerable questions.

The underlying inspection records, completion certificates, professional reports and correspondence should establish what happened.

The original tender raises another question

The history goes back further.

A procurement exercise launched in 2019 described a contract for the construction of 45 apartments in two buildings at Albion Street.

But even that record contains an apparent inconsistency: its stated breakdown of 29 flats in one building and 15 in another totals 44, not 45.

The development that eventually went ahead comprised 49 new-build flats.

By 2021, Adur’s audited accounts confirmed that a contract for those 49 homes had been let and construction was under way.

What is still missing from the readily available public trail is the documentary bridge between those stages:

the tender evaluation;

the award decision;

the signed Westridge contract;

the original contract price;

subsequent variations;

and the explanation for how the scheme developed into the final 49-home contract.

Major reconstruction

What is happening at Albion Street now is not simply snagging.

The council says significant problems have been identified with weatherproofing and design, including features which channelled rainwater towards flats, faulty damp-course arrangements and unsuitable materials.

The remedial scheme involves substantial work to parts of the exterior of the development.

By August 2026 scaffolding had been installed and contractors had begun preparatory waterproofing work.

Five years after construction began, the 49 homes remained unavailable.

The questions Adur now needs to answer

A complete project ledger would settle much of the financial uncertainty.

It should show the original approved budget, Westridge contract value, payments, variations, professional fees, demolition and enabling expenditure, Cheesmur costs, remediation expenditure, financing costs and capitalised interest.

It should also separately identify Homes England funding, Section 106 contributions, Right to Buy receipts and any performance-bond recovery.

The council should also publish or identify the documents showing who approved significant changes and expenditure throughout the project.

And it should explain the financing.

What is the interest rate?

What is the outstanding borrowing?

Who authorised it?

Why has almost £700,000 of capitalised interest appeared in the latest estimate?

Does that overlap with the £698,000 previously recorded?

How much interest is accruing each month?

How much rent has been lost?

What was Westridge’s final contract value?

What has Cheesmur actually been paid for Albion Street?

How much has been recovered from Westridge’s performance bond?

Why was the development reported as completed with phased occupation under way in 2025?

And ultimately:

What will these 49 council flats have cost the public when somebody finally receives the keys?

The evidence currently available does not provide a reliable final answer.

What it does establish is that a development begun in 2021, and subsequently reported as completed in March 2025, remained unavailable in 2026 while extensive remedial work was required.

The council itself says the homes are intended for local people on its housing waiting list.

Those residents are still waiting.

Evidence links

Adur District Council — Albion Street project page and updates⁠

Adur District Council — July 2026 announcement on major defects and £3m-plus remediation⁠

Adur District Council — October 2025 announcement on additional costs⁠

Adur Housing Delivery Test Action Plan — including the March 2025 completion statement⁠

Adur District Council 2021/22 accounts — confirming the 49-home contract had been let⁠