The government has backed the proposal of the Royal Liverpool and Broadgreen University Hospitals NHS Trust to end the private finance initiative (PFI) deal for construction work on the new Royal Liverpool Hospital to restart with public sector funding.
This will minimise the delay in opening the hospital to patients across Merseyside - the Trust says that subject to legal agreements being reached the work could restart as early as November and the hospital would then be completed in 2020.
The building works were being carried out by Carillion and all work stopped when the company went into liquidation earlier this year. Since then, the Trust and the government have worked closely to find a solution that puts patients first. Despite constructive engagement from the lenders who have funded the project to date, they have concluded they will be unable to complete and operate the hospital under the original terms.
The Trust’s board has therefore agreed that the PFI agreement should be terminated after September 30, which under the contract is the latest acceptable date for the hospital to be completed. The government has made it clear that it supports the Trust’s decision.
Health Minister Steve Barclay says: “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.”
Aidan Kehoe, Chief Executive at Royal Liverpool and Broadgreen University Hospitals, says: “We welcome the statement from Health Minister Steve Barclay. We would like to thank our government colleagues, The Hospital Company and funders EIB and Legal and General for all their hard work over the last nine months. We have all strived to maintain the existing project agreement, but it has become clear to us that this will no longer be possible. Our board has now agreed that the existing project agreement should be terminated, and that the Trust should complete the project.
“The trust intends to continue working with the existing construction contractors involved, so that the construction finishes as soon as possible, maximising the value for money of the taxpayers’ investment in the hospital.”
When completed, the hospital will have 646 beds on 23 wards, including a state-of-the-art critical care unit and a large clinical research facility. It will have 18 operating theatres and the emergency department will be one of the biggest in the North West.
