Government bails out Carillion's Liverpool hospital

The government has agreed to fund the completion of the Liverpool hospital left half finished by the collapse of Carillion.

Earlier this week the Royal Liverpool and Broadgreen University Hospitals NHS Trust confirmed it would cancel the PFI deal, a move which the government has now formally backed.

The trust said: “The government has now backed the trust’s proposal to end the current PFI deal, and complete construction work within the public sector as quickly as possible, and open the hospital to patients in 2020.”

The hospital was originally due to open last year.

Health minister Steve Barclay said: “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 [also being built by Carillion].

“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.

“The trust’s board agreed yesterday that the PFI agreement should be terminated after the 30 September 2018, which under the contract, is the latest acceptable date for the hospital to be completed. The government has made clear it supports the trust’s decision.”

Earlier this week it emerged official confirmation that Laing O’Rourke is being lined up to restart work on the hospital was being held up after it emerged the bust firm fitted the wrong cladding on the job.

Building understands Laing O’Rourke is waiting in the wings for the Royal Liverpool Hospital job which has been mothballed since Carillion went under in January.

Details of the timetable to complete the job were expected to be announced over the summer but these have now been put on hold after Arup completed a review of what Carillion had already built.

The engineer discovered Carillion fitted cladding which did not meet required standards means details of the rescue plan have still not been signed off.

And it said there were also problems with the beams which earlier this year former Carillion chief executive Richard Howson told MPs at the inquiry into the firm’s collapse had cost his firm £20m to fix.