Procure21 firms demand promise over its future

The group of 11 contractors building the government’s multibillion-pound health programme, Procure21, have challenged the government to confirm that the scheme has a future after the election.

Building understands that John Dodds, chief executive of contractor Kier, has sent a letter to health minister John Reid on behalf of the 11 framework firms praising the management of the Procure21 management team at NHS Estates and calling for reassurance over the scheme’s future.

The firms are worried that the government may scrap Procure21 as NHS Estates is to be abolished at the end of April and there has not been a firm commitment from government about its future.

Senior staff at NHS Estates will have to reapply for their jobs under a revised structure, but as yet it has remained unclear as to where Procure21 will sit within this structure.

A Whitehall source said that there has been huge praise for the Procure21 programme from within government, but that its future was still unclear.

The source said: “It is likely that Procure21 will sit in the private finance unit at the Department for Health. But the concerns of the builders involved have certainly been noted.” The source added that parliamentary undersecretary of state for health Lord Warner has replied to Dodds to reassure him that the scheme will be taken forward.

The government is considering using Procure 21 for building programmes such as schools

Whitehall source

It is also understood that the major contractor’s group, and other large governmental clients such as Defence Estates are set to call for the government to use the Procure21 template across government projects. The Whitehall source added: “While the government is deciding what to do with Procure21 it is considering whether it can be used for other building programmes, like primary schools.”

The eleven contractors and consortiums involved in Procure21 are: Kier; Laing O’Rourke; Carillion; Balfour Beatty; Interserve; HBG; Wates; Taylor Woodrow; a consortium of Sir Robert McAlpine and Norwest Holst; a consortium of Bowmer & Kirkland, Midas, Osborne and Simons; and a consortium of Amec, Costain and Mowlem.

NHS Estates management has just given the consortiums their annual appraisals and it is understood that about four have been given a tough time over the amount of work they are winning.

n The debacle over the £800m PFI hospital planned for Paddington, West London took a fresh twist this week as it emerged that the landowner Paddington Development Corporation is set to claim £260,000 from the team behind the Paddington Health Campus after a land deal for the site collapsed.

Building has also seen financial documents that from the NHS trust involved that state that the current estimate for the full liability for the cost of the project is £7m, plus an allowance for other exit costs of £1m.