Firms hold crisis talks to save Procure 21 framework

The government is to hold last-ditch talks with contractors on the NHS' Procure 21 framework next week in an attempt to save the scheme.

The 11 remaining firms on the initiative are to meet Rob Smith, the head of NHS Estates, to ask for a reduction in their £170,000-a-year membership fee.

Four of the 11 firms left - Carillion, Taylor Woodrow, Wates Group and Medicinq - have threatened to quit unless Smith addresses their concerns, and this has raised questions about the ability of the government to maintain large frameworks.

As Building went to press it was thought that Carillion would leave, whereas the other three said they wanted to work out their differences with the Department of Health.

Contractors on the framework are furious that they have picked up little to no work. Only Laing O'Rourke and Kier have prospered.

Mike Hobbs, programme director at Carillion, said it was still finalising arrangements with the DoH but that it would not be too long before it reached a conclusion. A spokesperson added: "We have only picked up one Procure 21 contract so we are discussing with the DoH how to go forward from here."

Steven Underwood, business unit director at Wates Group, said Wates was waiting for the outcome of discussions. He said: "Out of the 11 some are thinking of leaving, some are definitely leaving and some are staying. In the next couple of weeks positions will be solidified - who is in and who is out."

He continued: "We are currently in negotiations so I cannot say what level of fees we are asking for. We want Procure 21 to be commercially viable - we are not asking for the fees to be waived. It would be incorrect to say that the DoH will not lower the fees or move position."

David Walker, director at Medicinq, said the firm had not left. He said: "We are in discussions over how to stay on the list because we have invested a huge amount of time and money in it. We are in constant communication with Taylor Woodrow, Carillion and Wates."

Procure 21 has had to contend with the departure of former head of construction Peter Woolliscroft and the Symbia report, which said the programme had "ineffective management".

The DoH has floated several proposals on how to break the deadlock, including a deal whereby the contractors make a pro-rata payment linked to the volume of work released.

But Neil Pates, commercial director of Kier Health, confirmed Kier would not quit. He said: "We're not taking part in the discussions. We've no gripes. We're happy with Procure 21."

Despite the upheaval Stephen Ratcliffe, the Construction Confederation's chief executive, said frameworks had a future. He said: "Procure 21 has not worked but it is a special case. Not making it mandatory for the trusts to choose from the framework means it is doomed to fail. But frameworks are a good thing and have worked in the private sector."

A DoH spokesperson said negotiations were continuing. "We should have a clear position from all the firms shortly. As soon as we have confirmation from them we'll issue a statement."