Affordable housing developer goes bust

The future of a new housing development in Newtown has been thrown into doubt following the news that the contractor, R L Davies & Son Limited, has gone into liquidation.

The county council affordable housing development, located on the former Red Dragon Site in Plantation Lane, which is set to provide much-needed affordable housing in Newtown, is now at risk of being delayed.

The news has come as a shock to both the Powys County Council and residents who have been eagerly anticipating the completion of the new homes. The development was part of a wider plan to address the chronic shortage of affordable housing in the area, with the council partnering with R L Davies & Son Limited to deliver the project.

The company entered into liquidation on the 24th February 2023 and employed around 25 direct employees as well as many subcontractors, including subcontractors from Newtown.

In latest published accounts for 2020, RLD reported losses of £1.8m from revenue of around £14m, after being hit by Covid disruption and a 12-month over-run of its largest contract. Several tendering successes saw the firm build a £6.5m of contracts in pipeline by March 2022 giving it optimism for the year ahead.

The £3.5m development is being funded by the council and the Welsh Government, who have provided £2.4m grant funding towards the new council housing scheme. The site will feature 18 properties of bungalows and houses rated at EPC-A.

Cllr Matthew Dorrance, Deputy Leader and Cabinet Member for a Fairer Powys, said:

“Our housing development at the former Red Dragon site is almost finished. Some finishing works are ongoing to complete this development.

“Unfortunately, completion is delayed due to RL Davies, the principal contractor for the development, entering administration last month. We are working with the administrator to complete the development as soon possible so that the council can start allocating properties to applicants on the Powys Common Housing Register.

“The site is currently under surveillance with permanent security which will continue to remain in place.”

The liquidation of RDL has also raised concerns about the wider construction industry, with fears that other firms may also be struggling in the current economic climate. The Construction Industry Training Board (CITB) has urged the government to take action to support the industry, warning that thousands of jobs could be at risk if more firms go out of business.