Contract to build new Royal Liverpool Hospital scrapped

Directors at Liverpool's Royal Hospital say the contract to build their new hospital has been scrapped.

In a statement, Chief Exec Aidan Kehoe said construction cannot continue under the current PFI agreement. It comes after the collapse of building company Carillion earlier this year.

The government could now step in.

Credit: Photo: Royal Liverpool Hospital

The collapse of Carillion created an unprecedented situation with numerous complex legal and commercial issues that we have been working hard to try to find a solution to, alongside the various parties involved.

We would like to thank our colleagues at the Department of Health and Social Care, the Treasury, The Hospital Company and funders the European Investment Bank and Legal and General. We would also like to thank our local politicians, in particular our local MP Louise Ellman, our staff, patients and local people, who have supported us throughout this challenging period.

All parties have been committed to getting an agreement that enables construction to restart as soon as possible. Today our Board of Directors agreed that this could not be achieved within the existing PFI agreement and that this agreement should be terminated after the 30 September ‘long-stop date’.

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, by which 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. This is really positive news for our staff, patients and the people of Liverpool. We now have a solution and can work on moving forward.”

– Aidan Kehoe, Chief Exec, Royal Liverpool and Broadgreen University Hospitals NHS Trust