• West Midlands trust asks government for publicly funded solution to stalled hospital
  • Work halted on Midland Metropolitan Hospital in January when Carillion collapsed
  • Extra costs estimated to take hospital £150m over budget

NHS managers have asked the government to plough more than £300m into completing construction of a new hospital which ground to a halt after Carillion’s collapse.

The board of Sandwell and West Birmingham Hospitals Trust agreed on Thursday to back a taxpayer funded package to complete the Midland Metropolitan Hospital, after its PF2 deal with lenders was terminated last month.

The government will make the final decision.

The Midland Met, which is crucial to the sustainability of the trust’s acute services, is now due to open in 2022 – four years later than planned.

A cost analysis by Deloitte, carried out on behalf of the trust, reveals the cost of completing the hospital – which is two thirds built – is around £319m.

However, the building’s condition is worsening due to the weather, and the trust plans to tender an “early works contract” next week so that builders can carry out remedial works.

The remedial works would add another £20m to the scheme.

In total, the extra costs to complete the hospital are expected to take the overall price to around £505m – which is at least £150m over the original budget.

After the PF2 deal was terminated, the trust and the Treasury spoke to contractors about the possibility of setting up a new privately financed deal, but the trust said there was “clear aversion” in the market to that option. 

A privately financed deal was the trust’s initial preferred solution, but chair Richard Samuda said the decision to ask for public funding was made because the building needs “urgent attention” and a “partnership approach” is sought with the construction sector.

“Everyone involved in this project accepts that after seven months there is a need to choose the right option sooner rather than later,” Mr Samuda said.

Meanwhile, the government is yet to announce a solution to the other hospital Carillion was building for the NHS.

Discussions remain ongoing between the government, lenders, and the Royal Liverpool and Broadgreen University Hospital Trust over the future of the trust’s new acute hospital.

Construction firm Arup is completing a structural review of the site, which is key to determining the site’s future.

In his monthly report to the board last week, trust chief executive Aidan Kehoe described the delay as “frustrating for all involved”.

Source

August 2018

Source date

Sandwell and West Birmingham Trust board papers

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