A COUNCILLOR believes sub-contractors who lost out financially when the developer of a flagship Powys County Council housing scheme in Newtown went bust last year should be compensated.

On Thursday, April 18 the Governance and Audit committee will receive a report following an internal audit into the project management of the Red Dragon housing project.

Powys County Council £3.5 million housing development on the former Red Dragon public house and Maesyrhandir Youth Centre site in Newtown was opened last year.

In February 2023, Old Colwyn-based firm R L Davies and Son who were building the homes, went into administration.


Cllr Peter Lewington, who represents Newtown West, brought up the problems with the project which prompted the probe.

He revealed at a Governance and Audit committee meeting last September that businesses are owed thousands of pounds and had been told “to go and sort it out themselves with the administrators”.

Cllr Lewington said: “Having continually pushed for this report I am pleased that finally, the results have been published.

“However, we do need to reflect on the financial damage done to the sub-contractors involved in the Red Dragon development.

“The reports before the committee all focus on the council with no acknowledgement or thought towards the financial plight of the sub-contractors.

“Consequently, I will be raising the issue of compensation as these subcontractors should not be expected to pay for the councils multiple failings.

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“They entered into these works in good faith and have been badly let down by the council who now need to do the right thing and protect its reputation by making amends for its failures.”

Cllr Lewington he had been told by a contractor that they would not have continued working on the project if they knew of the financial issues going on behind the scenes.

Due to this they have “taken a large financial hit” which needs to be covered by selling machinery and borrowing money and will take “years to recover from.”

They told Cllr Lewington that the council at the time just wanted the project finished on time.