Royal Liverpool January

Calls for Government to take ‘direct control’ at Royal Liverpool

Charlie Schouten

Liverpool City Council is to discuss whether it should write to the Prime Minister to call for the Government to take “direct control” of the delivery of the stalled £335m Royal Liverpool Hospital, which is running more than two years late.

The hospital has been hit by a series of delays since its original completion date of March 2017 overran. Completion was first pushed back to February 2018, and delayed further when then-contractor Carillion reported cracks in concrete beams and asbestos in the ground.

Following Carillion’s collapse in January, The Hospital Company, which is managing the delivery of the hospital has undertaken a review to identify how much construction remains to be done on site.

As of the end of June, this review was still ongoing, and the Royal Liverpool and Broadgreen University Hospitals NHS Trust added costs were yet to be concluded.

Discussions have been advancing with a replacement contractor, understood to be Laing O’Rourke, to take on the project, but Cllr Paul Brant has now tabled a motion to debate the future of the hospital at a Liverpool City Council meeting on 18 July.

This states that the council “notes that the complex fallout from the insolvency of Carillion PLC could take years to resolve and that the construction of the new hospital cannot wait for this process to be finalised.”

It goes on to set out five points to be put to the Prime Minister from the council’s acting chief executive, setting out the council’s position on the hospital. These are:

  • The Government takes direct control of the project and ensures that the construction of the site is completed as swiftly as possible;
  • The Government makes available the necessary resources to ensure that the provision of the hospital is provided as soon as possible;
  • The Government ensures that no local suppliers are put at risk of insolvency or unable to continue to carry out their work as a result of the collapse of Carillion – and in particular ensures that payment for work completed is ensured immediately;
  • The Government ensures that, so far as possible, any losses arising from the collapse of Carillion PLC are born by the private sector – relevant insurers and investors in the project who accepted the commercial risks of the project – and not the public purse; and
  • The Government provides the people of Liverpool with regular updates on the progress of the new hospital.

Cllr Brant’s motion also notes that Mayor Joe Anderson has already written to the Prime Minister and the Secretary of State for Health – at the time, Jeremy Hunt – “seeking guarantees of the Government’s plans to ensure the completion of the hospital,” but added that replies so far have “had insufficient detail or commitments”.

In June, the Trust said that restarting construction was “an urgent priority for ourselves, funders, and Government departments”.

The council’s calls follow those by Liverpool Walton MP Dan Carden, who told Prime Minister’s Questions last week the development was now “a monument to corporate greed”.

Carden said: “Instead of waiting for commercial lawyers and accountants holding secret meetings with no public accountability, will the Government now call in this contract, buy out the investors and deliver a publicly-owned, publicly-run hospital for the people of Liverpool?”

In response, cabinet minister David Lidington, who was standing in for Theresa May, said the Government was “absolutely committed” to delivering the hospital “as rapidly as possible”.

The Royal Liverpool and Broadgreen University Hospitals NHS Trust declined to comment.

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Have I worked this out correctly. The hospital was to be owned by private investors on a lease to NHS. Carillion were contractors to the owners. The liquidation results in the owners not having enough money to complete the building with a new contractor such that the investment in the lease to NHS works. Owners are hanging on hoping someone, the government, will buy them out at a level that gets some of their money back and with no liability to the costs to complete. So therefore current deadlock and I expect the replacement contractor not willing to restart other than on a cost plus basis.

By JTC

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