New contractors are being brought in to complete a Newcastle housing project which was at the centre of a political storm, after its original builders went bust.
North Shields-based Orca LGS Solutions was stripped of a multi-million pound council contract to build new homes in Gosforth and Throckley last year, with concerns at the time that the schemes would not be completed on schedule or on budget. The episode was a particular source of controversy given that the firm, which it has now been confirmed has entered liquidation, had ties to Newcastle City Council leader Nick Kemp.
Prior to becoming council leader, Coun Kemp is known to have lobbied the local authority on Orca’s behalf and was its “Director of New Business and Housing Strategy”. Eight months on from Orca losing its contract over the unfinished modular homes in Aln Crescent and Broomyhill Road, the council has announced that it has now appointed new specialists to help complete the works.
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A council spokesperson said: “We are currently managing construction on both sites through our internal teams at the council. External sub-contractors have been appointed through the appropriate channels to carry out specialist work.”
Information on Companies House shows that Orca went into liquidation in March with £3.9m worth of debts. The city council is named among the list of creditors owed money by the firm, whose registered address was at the North Balkwell Farm Industrial Estate, but only for the sum of £1.
The local authority had previously confirmed to the Local Democracy Reporting Service that Orca was paid more than £2m for the contract, which was awarded without a competitive bidding process, and that it would not seek to claw any of that money back. Civic centre officials said they were “satisfied” that the £2.247m given to Orca “properly reflect” the amount of work that was done on the two developments, despite neither of them being completed.
In emails seen by the Local Democracy Reporting Service (LDRS), Coun Kemp had told council staff in 2021 that Orca offered a “fantastic opportunity” and was “keen to develop a strong relationship” with the authority. He subsequently became leader of the council in 2022, replacing Nick Forbes.
Last summer, Coun Kemp was the subject of a public complaint regarding the fact that his role with Orca was not declared on the council’s register of interests. That was dismissed on the grounds that he was not directly employed by them and was given his title for the purposes of “outward facing activity”.
Orca was instead a client of his PR and lobbying agency, NKA Public Affairs, and the council concluded he was not required to declare the role on his register of interests and that no rules had been broken.
