Lucy Powell urged ministers to reconsider costly legal case for

Published: 22 October 2025. The English Chronicle Desk. The English Chronicle Online.

Lucy Powell, the Labour MP widely tipped to become the party’s deputy leader this week, intervened on behalf of a property development company founded by a Labour donor, urging ministers to reconsider legal proceedings that could have cost the firm millions of pounds, the Guardian has revealed.

The MP for Manchester Central wrote to Angela Rayner, then serving as housing secretary, highlighting what she described as “disproportionate” government action against Urban Splash, a Manchester-based developer established by Labour donor Tom Bloxham. Powell’s intervention came days after she encountered Bloxham at a Labour fundraising dinner and follows previous meetings with the company’s executives.

The controversy centres on Urban Splash being required to repay £49 million of taxpayers’ money. The funds were spent on making seven buildings in central Manchester compliant with post-Grenfell fire safety regulations, according to the Department for Housing. Ministers had applied to a property tribunal seeking a remediation order, which would legally compel the developer to cover the costs.

Powell’s correspondence, dated 10 December 2024 and obtained by the Guardian, urged that “every effort is made to engage with Urban Splash outside of lengthy legal proceedings” and warned that pursuing the case in court “will ultimately cost the taxpayer and will likely put Urban Splash out of business.”

Her letter referenced a note she had received from Bloxham on 5 December, in which he recounted meeting Powell at the Rose Network event the previous evening. In his letter, Bloxham criticised the housing department for “increasingly vindictively pursuing us with heavy-handed lawyers” and suggested that Urban Splash was being made “a scapegoat” to distract from the department’s mistakes. He described feeling “betrayed by a government I helped get elected” and included a video celebrating the company’s 30-year history, which he said he had shared with Powell during a prior meeting.

Bloxham, who donated £8,807 to the Labour party in 2020 and has previously contributed to Tony Lloyd, Powell’s predecessor as MP for Manchester Central, has denied any wrongdoing in relation to his political donations.

Powell’s office emphasised that the MP acted transparently and in her capacity as a constituency representative. A spokesperson stated: “Lucy has made many representations to the government and relevant agencies over the years regarding difficult cladding issues on behalf of leaseholders and has met with residents, freeholders, and developers in that capacity. In mid-November, she met with Urban Splash for a constituency surgery meeting in Manchester, discussed the challenges they were facing, and requested details in writing before making a formal representation, which she did openly and transparently. She made it clear in all correspondence that developers should pay their fair share of remediation costs.”

Sources close to Powell said she met Bloxham in her constituency on 15 November 2024, viewed the video he referenced, and requested he put his arguments in writing. The two later crossed paths at the fundraising event on 4 December, attended by more than 500 people, with Bloxham following up in writing the next day.

Powell’s office clarified that she had not received or facilitated any donations from Bloxham or Urban Splash apart from a pre-2020 instance, when Bloxham sponsored prizes in her annual schoolchildren’s Christmas card competition worth up to £300. Additionally, Powell’s constituency office is located in Beehive Mill, a property regenerated and owned by Urban Splash, for which her office paid market rent, a fact verified by the MPs’ expenses regulator.

The intervention was not limited to December. Powell also met Bloxham and another Urban Splash executive in her constituency office on 4 April 2024 and sent letters to Rayner on 22 April and 6 August, urging a meeting with the company. In her correspondence, Powell cautioned that the legal action could render the company insolvent and stressed that her engagement was in the capacity of a constituency MP.

Bloxham’s December letter was particularly critical of the previous government’s handling, highlighting what he described as Michael Gove’s “historic, huge mishandling of the post-Grenfell response” and the “ministry’s and its advisers’ continued mistakes and incompetence,” which he said threatened both Urban Splash’s existence and the government’s broader growth agenda.

The developer argued that pursuing the remediation order was neither “fair, just or equitable” and suggested that ministers should consider an open discussion to agree on a financially viable solution for the company, rather than incurring “millions of pounds in pointless litigation” that would drain taxpayers’ money. According to Bloxham, the firm faced a potential £48 million bill despite being valued at £27 million, with the department having overestimated its worth at £75 million. He also criticised attempts to involve related companies in the legal action, further complicating the matter.

A spokesperson for Urban Splash confirmed the case was ongoing but declined to comment further due to the ongoing legal proceedings.

Meanwhile, a spokesperson for the Ministry of Housing, Communities and Local Government emphasised that the government remained committed to enforcing building safety regulations. “We are taking ongoing legal action against Urban Splash to ensure that they pay for the remediation of homes they are responsible for. We make no apology for taking strong action to keep residents safe and are absolutely determined to hold developers accountable,” the spokesperson said.

The case highlights the delicate balance elected officials must maintain between supporting constituents and avoiding conflicts of interest when lobbying on behalf of businesses, particularly those with prior political donations. Powell’s intervention has drawn attention amid heightened scrutiny of MPs’ lobbying activity following a series of scandals.

Political commentators note that while MPs regularly advocate for their constituents, interventions on behalf of companies with financial ties to the party can be politically sensitive, especially when legal proceedings involve significant sums of public money. Powell’s defenders emphasise that she has acted openly and in line with standard parliamentary practice, representing her constituency’s interests, while critics argue that any perceived favouritism can undermine public confidence in impartial governance.

Observers also point out that the Urban Splash case underscores ongoing challenges in post-Grenfell building safety enforcement. Developers and government departments alike face complex financial, legal, and safety responsibilities, and the dispute highlights the potential for costly legal action when compliance issues remain unresolved.

While Powell’s letters and meetings aimed to encourage dialogue rather than circumvent legal obligations, the episode is likely to become a talking point in the deputy leadership contest, illustrating the fine line MPs must walk between advocacy and propriety.

As the legal proceedings continue, the wider implications for building safety enforcement, developer accountability, and parliamentary lobbying standards remain under close scrutiny. The government has consistently maintained that strong enforcement is necessary to ensure that property developers contribute to making buildings safe, particularly in the wake of Grenfell Tower, and Urban Splash will be required to meet its obligations under the law, regardless of political interventions.

The Urban Splash case, and Powell’s involvement serve as a reminder of the complexity of governance and the competing pressures on MPs to represent their constituents, uphold party standards, and act within the boundaries of public accountability. It also highlights the ongoing public concern around lobbying, donations, and the use of political influence to affect legal or regulatory outcomes.