• Laing O’Rourke will finish new hospital build in Liverpool
  • Government will pay for construction and PFI termination fees

Construction of a new acute hospital is set to resume almost a year after Carillion was liquidated, following a deal between the government, lenders, and local NHS chiefs. 

Building firm Laing O’Rourke will finish the new hospital on behalf of the Royal Liverpool and Broadgreen University Hospitals Trust, which will terminate its private finance initiative contract as a result.

Work on the hospital stalled when Carillion went bust in January, prompting contingency plans across 14 affected NHS trusts.

The trust’s board agreed last month to terminate its contract with PFI provider The Hospital Company (Liverpool), but the parties still needed to agree financial details. 

The government has agreed to foot the trust’s £42m termination bill, which will be paid to lenders European Investment Bank and Legal and General.

The remaining construction work will also be paid for by the government, with funding being made available from the Department of Health and Social Care’s public dividend capital scheme.

In a statement the trust said this means the total cost of the project to the public sector will be lower than envisaged when the PFI deal was struck in 2013.

Aidan Kehoe, chief executive of the trust, said the agreement provided “significant savings” and represented “good value for money for the taxpayer”.

“The lenders in particular have shown considerable goodwill in reaching this agreement,” Mr Kehoe said.

In total, the EIB and Legal and General supplied £180m of funding towards the project.

The trust will now become responsible for completing and maintaining the hospital.

Local chiefs hope construction can start next month and that the project can be finished in 2020. Construction was initially meant to be completed in March 2017, but the project was delayed by asbestos and structural issues.

The new hospital will provide single room ensuite accommodation for patients, with 646 bedrooms across 23 wards.

It will have 18 operating theatres and one of the biggest emergency departments in the north west.

In August, the government announced it would bail out Sandwell and West Birmingham Hospitals Trust after its new hospital was also affected by Carillion’s demise.