Cost of Carillion hospital projects doubles
The cost of completing two hospitals that were being built by construction giant Carillion when it collapsed has doubled, running hundreds of millions of pounds over budget, according to a report by the spending watchdog.
The 669-bed Midland Metropolitan in Sandwell, which was due to open in October 2018, is now expected to open in July 2022 and will cost at least £988m – more than £300m over budget. The taxpayer is currently expected to pay £709m of this, an increase of 3% from the original forecast, the National Audit Office report says.
Meanwhile, the 646-bed Royal Liverpool, originally scheduled to open in 2017, is now forecast to be completed in the autumn of 2022 and cost more than £1bn to build and run compared with an original estimate of £746m.
The private sector has borne most of the cost increase, with shareholders, investors, insurers and Carillion losing at least £603m on the construction of both projects, the auditors said.
The Liverpool hospital is now set to be completed by Laing O’Rourke in the autumn of 2022, more than five years after the initial date of June 2017.
Meanwhile, the Midland Metropolitan Hospital is three years and nine months behind schedule and will be completed by Balfour Beatty in July 2022.
A government spokesman said: “As this report shows, the private sector has borne the brunt of Carillion’s catastrophic failure to complete these two projects.
“To support staff and local communities in Sandwell and Liverpool, we’re giving both Trusts the funding they need to minimise the delays caused by the collapse of Carillion and get these two new hospitals open.”
Unite assistant general secretary Gail Cartmail said: “The report makes for grim reading and endorses what hospital patients and NHS staff in Liverpool and the West Midlands already knew.
“Two desperately needed hospitals are going to be years late and in the meantime local communities are left with facilities that are no longer fit for purpose.
“The responsibility for these delays has to lie squarely at the door of the government, which consistently failed to prioritise the overriding need that these hospitals had to be built.
“While the report notes the financial cost of the projects the human cost of the delays of completing the hospitals has not been recognised.”
More than 3,000 jobs were lost when Wolverhampton-based Carillion folded, with 75,000 people working in its supply chain affected. It failed with debts of £7bn.
The circumstances of Carillion’s collapse are being investigated by the Financial Reporting Council and the Official Receiver.
