Taxpayer cash will be used to fund about 18 months of work to complete HKS and NBBJ’s Royal Liverpool Hospital project, ministers have confirmed.
Health minister Steve Barclay this afternoon said the government would fund the remainder of the scheme, which has been on hold since main contractor Carillion collapsed at the start of this year.
The announcement comes after Royal Liverpool and Broadgreen University Hospitals Trust yesterday evening (25 September) announced its intention to cancel its financing arrangement with the European Investment Bank and Legal & General pensions fund.
HKS and NBBJ won the scheme to create a 94,000m² hospital back in 2013. The project - providing about 650 beds and 20 operating theatres - was initially scheduled to complete in 2017. But this was pushed back to spring 2018 and no progress has been made on site since Carillion went into liquidation in January.
It emerged earlier this month that a report by structural engineers Arup had identified the need for improvements to the structure and to cladding installed by Carillion. The AJ reported then that the Trust could seek government funding to finish the scheme if it could not secure a deal with the funding consortium – known as the Hospital Company – by the end of this month.
Barclay said this afternoon: ’When I visited the new Royal Liverpool hospital in May, I made clear the government’s commitment to ensuring the construction of this state-of-the-art hospital was finished. I am pleased to today confirm that the government will step in and publicly fund the remaining work so that the hospital is completed, as it has also done with the Midland Metropolitan Hospital in Birmingham.
‘It is a central purpose of PFI that construction risk sits with the funders. This has also been at the heart of the time it has taken since January when Carillion went into liquidation, as the lenders commissioned detailed expert assessments of the previous construction work.’
Trust chief executive Aidan Kehoe said in a statement last night: ’We have now reached an agreement in principle with The Hospital Company (Liverpool) on the way forward for the new Royal.
’Subject to detailed government approvals, and legal agreements being finalised, we intend to have a managed termination process after 30 September, whereby the benefit of the analyses and pre-works discussions by the lenders will be transferred to the Trust.
’This will see The Hospital Company (Liverpool) hand over its contracts for construction, supply chain and facilities management to the Trust over the course of the next few months. This is now the fastest way in which we can see construction on the new Royal restarted and means we have outlined a process for doing so.’
A spokesman for the Trust told the AJ this morning that there was 18 months of work left to do on the project, but work could restart this year and complete in 2020. It has been reported that Laing O’Rourke, which is working on a project next door, could be brought in to replace Carillion and finish the Royal Liverpool job.
HKS and NBBJ have been contacted for comment.