• Government confirms funding to complete construction of Midland Metropolitan Hospital
  • ‘We’re not getting anything for free’ says chief executive
  • Procurement for new contractor expected to be launched in November

A government pledge to provide funds for completion of a new acute hospital hit by Carillion’s collapse has been welcomed by the chief executive of the affected trust.

Toby Lewis, CEO of Sandwell and West Birmingham Hospital Trust, told HSJ the government’s commitment to funding the hospital – which was confirmed today – meant the Midland Metropolitan “will be in place” by 2022.

It comes eight months after the liquidation of construction company Carillion, which had built two thirds of the hospital under a public private partnership.

The PF2 deal, that was in place with The Hospital Company (Sandwell) ,was terminated last month. The hospital is expected to cost £150m more than budgeted, with a total price of around £505m. 

Last month the trust said it would cost around £319m to finish the hospital, and the government has today said it “will provide funding for the remainder of the building work at Midland Metropolitan Hospital”. Detailed terms of the deal have not been set out, and the Department of Health and Social Care declined to answer if the trust would have to repay the money.

Asked if the trust would, in effect, be getting a free hospital because it will not have to pay the PF2 provider for the construction, or unitary payments, Mr Lewis said “we’re not getting anything for free - this is not a bailout”.

He said the trust will have to “make cost improvement programmes above national norms”, and meet the costs of maintaining the building.

But he added: “If there is any small advantage to a move away from PF2 we will expect to see that dividend invested in primary care and mental health.”

PF2 deals are a new type of contract under the private finance initiative, where public sector equity is required to ensure greater public oversight of the contracts.

Health minister Steve Barclay said: “We are not only giving patients in Sandwell and west Birmingham world-class NHS facilities on their doorstep, but also showing our determination to build an NHS fit for the future – all whilst making sure taxpayers’ money is spent in the best possible way.”

The trust is in the process of letting an early works contract for a builder to carry out remedial work on the site, which has deteriorated since construction was halted.

Mr Lewis said he hoped today’s announcement meant an eight-month procurement could be launched in November for a contractor to finish the work on the hospital.

The trust has agreed with commissioners to pursue a “limited reconfiguration” of some patient services from 2019, as a result of the delayed opening. 

As part of this, the trust will receive some capital funding from the Black Country sustainability and transformation partnership to cover the reconfiguration and costs of maintaining estate and IT services at its City Hospital until 2022.

“The principle is we move as little as possible,” Mr Lewis said.

He said the trust is looking to “mitigate the risk of staff shortages causing difficulty for patient quality”, and “maximise the opportunity” to have seven-day services ahead of the Midland Met opening.

Services that may be reconfigured are gastroenterology, respiratory medicine, older peoples medicine and elements of acute medicine.

Mr Lewis added the trust will “very assertively” pursue integration arrangements with local primary care, community and social care providers from April 2019, regardless of delays.

An “integration contract” is expected in the next commissioning intentions of the Sandwell and West Birmingham CCG to “join up care across Sandwell, north and west Birmingham”, he said. 

The government is yet to make an announcement over the future of the new hospital in Liverpool which Carillion was also building.

  • Article updated at 3.54pm on 16 August after incorrect information was provided by DHSC over the terms of the deal.