Westminster City Council's former Labour administration has faced criticism for awarding a major demolition contract to Keltbray, a firm fined £16 million by the Competition and Markets Authority (CMA) for bid rigging. The CMA imposed the fine in March 2023 after finding Keltbray engaged in cover bidding, a practice where companies submit deliberately high bids to lose tenders, potentially driving up costs for customers.
Keltbray's Fine and Contract Award
Keltbray was among 10 construction firms collectively fined nearly £60 million for colluding on prices in competitive tenders. Despite this, Westminster City Council, under its then-Labour leadership, granted Keltbray a £3 million contract for demolition works related to the Church Street regeneration project. The contract was later increased to £6,310,634 in July 2025 due to additional works, including undiscovered basements and asbestos.
Conservative Councillor Paul Fisher, now Cabinet Member for Value for Money and Finance after the Tories regained control of the council in May, challenged the decision at a recent Value for Money and Transformation Policy and Scrutiny Committee. He asked: “My question to members of the council is – insofar as we can do, don’t we want to avoid that? Through proper due diligence and contract management.”
Defence from Labour
Councillor Ellie Ormsby, Leader of Westminster Labour Group, defended the decision, stating that Keltbray was one of only two companies “technically capable of delivering the work” – both of which had engaged in cover bidding. She told the Local Democracy Reporting Service (LDRS) that the contract, which received 10 bids, was awarded by her predecessor. Five of the ten bidders had previously been found to engage in cover bidding.
Ormsby said: “Given the limited pool of suitably qualified contractors, there were no viable alternative bidders who met the technical requirements of the project. Who would the Conservatives have appointed instead: a company that was not technically capable of delivering the work, or one that was significantly more expensive?”
Additional Works and Issues
Once demolition commenced, further issues on the site that “could not reasonably have been identified beforehand became apparent”, including undiscovered basements and asbestos. Ormsby added: “Addressing these issues was essential to ensure the work could be carried out safely and resulted in a change to the project’s scope and, consequently, the contract value. The extra work would have been needed whoever had the demolition contract.”
The new Conservative administration has promised a review of all council contracts over £5 million. Meanwhile, Keltbray's fine was increased to £18 million in December 2024 after a failed appeal.
