Abandoned: Beech Tree Place this month – they have not had any builders on site for four months, since Real went bust. Real has close associations with banned builders Rydon

SPECIAL INVESTIGATION: Figures associated with a company that is banned from getting government contracts and grants because of its part in works carried out to Grenfell Tower have emerged on the board of another firm working on a housing scheme in Sutton that received nearly £10m in subsidies – and council officials knew. EXCLUSIVE by CARL SHILTON

Rydon switch: council finance director Richard Simpson knew of Real’s corporate background

The inferno that scorched through the Grenfell Tower in June 2017, claiming the lives of 74 people, has had a profound effect on attitudes to public housing in this country. And while the full consequences of that tragedy have yet to play out, some decisions have been made about the use of public money with profit-driven private firms to deliver new homes.

The Rydon Group employed more than 650 people in their construction business. They were the contractors responsible for the refurbishment of the Grenfell Tower, including the controversial installation of flammable cladding.

The Grenfell inquiry is ongoing, but Rydon has already paid out £26.7million to settle some claims arising from the tragedy. They have also been banned by the Mayor of London and the Levelling Up department from getting government contracts or public grants.

Rydon had begun divesting itself of its construction business, as another set of companies were registered. One of the companies was set up with at least three directors who had been on Rydon companies’ boards. It was initially registered as Rydon LSE Ltd. One of its directors, Alan Penrhyn-Lowe, had also been a director of no fewer than six Rydon companies, including one called Rydon Sutton Ltd.

Penrhyn-Lowe resigned as a director in February 2021, just before the company changed its name to Real LSE Ltd.

According to Companies House records, Rydon LSE Ltd was originally registered as a business in January 2020, when their office address was given as Rydon House, Forest Row, East Sussex.

Changing the company’s name from Rydon to Real was “like putting lipstick on a bulldog”, according to a Grenfell survivor group.

At the point in early 2021 when the company changed its name to Real LSE Ltd, under new ownership, it still had one director who had previously been a board member of a Rydon company.

Grenfell legacy: the inquiry has not yet finished, but Rydon has already paid out millions in compensation

It was soon after that Sutton Council decided to appoint Real LSE Ltd as building contractors for their flagship regeneration project, Beech Tree Place.

That scheme, originally budgeted to cost £30million, involved demolishing 25 council homes and building 92 flats in four blocks on the site. It was subject to applications for nearly £10million in subsidies and grants from the GLA and the Government.

And Inside Sutton has found that senior officials at the council knew about the ban on Rydon receiving contracts or grants.

There’s nothing illegal about such a ploy, but there’s plenty that is highly questionable, especially for a local authority which is complicit in the arrangement.

The elderly and vulnerable residents of Beech Tree Place who were displaced for the demolition work to commence, and the Council Tax-payers of Sutton may be paying for the council’s choice of developer for many years to come, after Real collapsed into financial administration earlier this year.

As the Beech Tree Place deal unravels, and the council has to tender for a replacement builder, the authority’s officials’ part in getting public subsidy to a re-branded version of a banned construction firm is likely to draw fierce criticism from local politicians, as well as condemnation from Grenfell survivor groups.

Richard Simpson is the finance director at Sutton Council. While he would not have been directly involved in the evaluation of the builders’ bids for the construction work, he has confirmed that he was indeed very well aware of the relationship between Real and Rydon.

In his previous job at Croydon Council, Simpson had been the first director of Brick by Brick, the housing firm that received at least £200million in loans from the council that led to its financial collapse.

What’s in a name?: Real LSE Ltd was set up by Rydon

In 2022, the budget for Beech Tree Place rocketed to £44.2million, but the council bypassed scrutiny by councillors by invoking an “urgency procedure” to allow for the increased spending. The real aim of this move was to ensure that they secured grant funding from the GLA.

Inside Sutton has uncovered crass insensitivity by senior officers at Sutton Council, and at its consultant, CPC. Athough former Rydon management were involved in the new company, council officials and CPC failed to raise a single concern, despite the bans by the GLA and DLUHC.

The author of the council’s procurement document, CPC’s Philip Pamment, stated in the report: “Real group, known as Rydon Ltd within the procurement framework…”

So Pamment knew and his report stated the Rydon link clearly. Pamment’s CV notes that he has written articles on the Hackitt Report, which investigated fire safety and building regulations following Grenfell.

The GLA told Inside Sutton: “In June 2018, the GLA made the decision to suspend entering into a framework agreement with Rydon Construction Ltd, preventing it from accessing work through the GLA’s LDP2 development framework.”

New build: Paul Nicholls bought a number of interests from Rydon and renamed them Real

However, while the GLA is directly responsible for the companies that sit on its own development framework, contractors on GLA-funded developments, such as Beech Tree Place, are appointed by development partners such as Sutton Council, not the GLA. A neat way of bypassing any ban.

The GLA committed £7.7million to Beech Tree Place. Other housing grants from Levelling Up brought the total subsidy up to £9.6million.

The intertwined corporate history of Rydon and Real is central to this tale.

In March 2021, Rydon offloaded its London and south-east construction businesses and projects to the recently-formed company, Real Places Ltd (the holding company). Real was run by Paul Nicholls, the former MD of another housebuilder, Wates Residential. The Rydon subsidiaries that Nicholls took over included Real LSE Ltd. Some 100 Rydon staff moved to Real companies.

This move was met with criticism from groups representing Grenfell survivors and bereaved.

Easy Rydon: Mark Unsworth held a senior job at Rydon, and became a director of Real LSE

One of the directors of the soon-to-be-rebranded Rydon LSE was Mark Unsworth. Unsworth had been Commercial Director at Rydon Construction Ltd since 2018. On February 28, 2021, Unsworth resigned as a director of Rydon LSE. Then, as if by magic, he was reappointed as a director of the renamed Real LSE Ltd the very next day, March 1 2021.

It would be Unsworth who spearheaded Real LSE’s bid for the work on Beech Tree Place in Sutton. Unsworth was also a director of a company founded by Nicholls, Real Contracting Group Ltd, appointed in February 2021 two weeks before the deal between Rydon and Real, so he held directorships of both Rydon and Real.

Again, this is all entirely legitimate business practice. But it shows the continuing close relationship between Rydon and Nicholls’ new Real companies.

The pitch document produced by Real LSE for Sutton to tender for the Beech Tree Place project included as examples of their expertise a number of jobs completed by Rydon, such as the Durand Estate regeneration in Hackbridge which started in 2009. So it should have been crystal clear to the procurement officials at Sutton Council, as well as CPC, that former Rydon management was running the show at Real LSE Ltd.

But the intrigue and amazing coincidences continue.

Inside Sutton asked Sutton Council why, as part of its procurement process, it had chosen the relatively obscure but now lapsed Catalyst Framework to select potential contractors. Sutton had previously sought costings from the much larger A2 Dominion and Notting Hill frameworks. The council refused to comment, other than to say they had used a “recognised” procurement framework.

Sutton’s senior lead officer on the regeneration, Adam Tucker, was a former employee of Catalyst, the housing association (now part of Peabody) whose framework Sutton Council used. Tucker also has a long professional association with Unsworth, as revealed in a glowing LinkedIn appraisal given in October 2023.

“I have worked with him for many years,” Tucker wrote.

“We negotiated a c£37million contract with him in 2022, and the negotiations were completed in an exceptionally short timescale with diligence and (again) creativity, which enabled us to deliver on our Start on Site commitments to the GLA.”

What is unmentioned in the tribute is that the £37million contract (part of the new £44.2million overall cost) failed spectacularly.

Missing detail: Sutton Council official Tucker’s public endorsement for Unsworth fails to mention Real going into administration and the collapse of the deal

We asked the council if their staffer was involved in the subjective evaluation of the two competing bids for the Beech Tree Place contract. The council refused to give an answer.

“Sutton Council will not comment on the involvement of or advice given by any individual officers,” said the council chief executive, Helen Bailey.

“Decisions are taken by the council on the basis of advice provided by officers corporately based on their professional expertise.”

There is no suggestion that there is anything illegal in these actions. But officials and consultants were aware of the Rydon history, and they would have been failing in their professional duties if they were unaware of the GLA and DLUHC bans on Rydon companies.

So the insensitivity in light of what happened at Grenfell, and the betrayal of promises to the Beech Tree Place residents, exposes a suspicion that Sutton Council and its officers seem to value securing grant money from the GLA over any concern for ethical propriety in procurement and resident engagement.

But the fun doesn’t stop there.

Officers were warned about Real LSE’s precarious finances by Councillor Tim Crowley during and after the Urgency Committee meeting in August 2022 that agreed the extra £14.2m finance.

Crowley was concerned that the only two bids for the work came in just £40,000 apart. He questioned how a new company, Real, with no financial track record, could simply take over Rydon’s slots on supposedly highly curated and financially tested frameworks. He noted that Real was asking for a ten-day payment, a sure sign of cashflow issues, and he pointed out that Real would impose a 1% surcharge if they didn’t get this cheeky concession, taking their bid price above that of their rival.

Hard hat: London Mayor Sadiq Khan provided a massive subsidy to a firm linked to Rydon, despite the Grenfell ban

Crowley also questioned how the Real LSE bid was judged to be subjectively superior to the rival bid from Higgins.

The council response was that their hands were tied in terms of procurement.

However, in August 2023, just a few days before Real LSE went into administration, a number of charges were registered against Real companies, including Real LSE. Charges are often used to protect the financial interests of a third party or lender.

Documents posted at Companies House show that the Real companies were being funded by loans (£5.3million) and an overdraft facility (£3.1million) from… Rydon Regeneration Ltd, and that Rydon was providing machinery and plant to Real.

Real LSE Ltd’s financial reliance on Rydon raises again the valid question of whether Real was just a front for Rydon.

But it was when selling its companies to the totally new, unconnected company called Real that Rydon pulled off one of the biggest, cockiest and possibly nastiest pieces of corporate trolling ever witnessed. Or perhaps it was all an astonishing coincidence.

Rydon Regeneration Ltd – which holds charges over the Real companies – was formed in August 2004. Until March 31, 2021, the company’s name was … Real Ltd. So Real has really always been a brand of Rydon.

And to add to the intrigue, in October 2023, Rydon directors formed Rydon (Ealing) Ltd and Rydon High Lane Ltd, presumably in the hope of scooping up from the administrators their former development companies sold to Real.

In charge of Rydon is Bob Bond, who is a director of these new companies and practically every company in the group. Bond was widely castigated when it was revealed his pay had risen to around £500,000 a year and he enjoyed a lavish lifestyle while the Grenfell inquiry was under way.

Sutton Council is now re-procuring for a contractor to take over the Beech Tree Place project. A decision is expected to be put before a meeting of Sutton’s housing, economy and business committee possibly as early as next month. Sutton’s residents can only hope that those in charge of selecting a contractor – presumably the very same people who believed Real LSE Ltd was a good choice – might do a bit more due diligence this time.

They ought to consider, also, the feelings of Grenfell survivors and bereaved, who find it hard to understand why Sutton Council didn’t act on what they knew about the links between Real LSE and Rydon.

After all, the Mayor of London knew … and he banned Rydon from his London projects. It must gall Sadiq Khan to know that Rydon, through Real LSE, may yet benefit from millions of pounds of GLA grants.

Read more: Council’s stalled housing development could cost £50m-plus
Read more: #PennReport: Cover-ups and denial over Brick by Brick failure
Read more: Sutton’s Simpson show can’t account for £2m SDEN subsidy

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