The impact of Carillion’s fall on its unpaid suppliers has been much rued, but the general public also suffered – from unfinished public hospitals
You may not mourn the loss of Carillion from the pantheon of major UK contractors. You may – now over 12 months since its implosion – consider that corporate ineptitude on such a scale deserved to meet with failure. Yes, 43,000 staff faced huge upheaval and 30,000 suppliers were out of pocket, but – the argument goes – in business only the fittest survive and the £5bn-turnover giant was anything but healthy when it went to the wall with just £30m cash in the bank.
But what is harder to dismiss are the aftershocks being felt by vital public services that once depended on Carillion. Two of the contractor’s most high-profile problem jobs in the UK – and which helped bring it down – were former PFI hospital jobs left in limbo the moment it was forced into liquidation. So what has happened on these sites in the intervening months and how are local communities coping without the new hospitals they were promised?
Although the source of their woes is the same, the two hospitals – the Royal Liverpool and the Midland Metropolitan – are facing very different dilemmas now. For Royal Liverpool, Carillion had progressed quite far on the £335m job – but this has been more of a curse than a blessing. The hospital’s biggest headache is a series of structural problems. As far back as 2016 the contractor knew about two cracked concrete beams and ex-Carillion boss Richard Howson told MPs after the firm went bust that eight beams were affected, costing the firm £20m in remedial works.
Royal Liverpool trust is facing the dispiriting prospect of its new contractor having to rip out old work and do it all over again. What is unclear is: at what cost?
Later in the year Arup’s structural review of its work confirmed the beam problems and revealed unsafe cladding. Then in February the hospital trust’s board warned of “extensive structural remedial works” relating to the concrete frame, the internal finishes and the cladding. Rumours are, there are over 80 defects.
So the trust is facing the dispiriting prospect of its new contractor Laing O’Rourke having to rip out old work and do it all over again. What is unclear is: at what cost? The scale of these problems is such that the trust has to present a whole new business case to the Department of Health and in the meantime it is having to spend £1m on the old hospital just to keep staff and patients safe.
And what of the opening date – originally meant to be 2017, then delayed by Carillion to February 2018? Last year the trust indicated it could be towards the end of 2020 at the earliest, but it is still waiting for Laing O’Rourke’s detailed construction programme – due in March – and the latest comments from health minister Stephen Hammond about “complex remedial works” have been taken by some to mean “expect further delays”.
For Midland Met, defects are less of an issue; the real problem is that when the site was effectively abandoned rather than mothballed it was left exposed to the elements for most of last year. Balfour Beatty was awarded a £13m early works contract some months back to put some of this damage right, but the trust is still looking for a main contractor and won’t be in a position to restart work in earnest until October at the earliest.
There is no available data that shows a causal link between the construction delays and individual patient outcomes, but hospital staff will be in no doubt that services are being impaired
All of which means a hospital that should have opened last October is now not expected to be operational until 2022 – that’s four years late and seven years after the original contractor was hired to build it. Again, the eventual price-tag could be eye-watering. The trust paid Carillion £204m out of a £297m budget but now it is set to cost another £320m to get the hospital into a functioning state.
Of course, the hidden costs to local communities will be felt in terms of patients’ health. There is no available data that shows a causal link between the construction delays and individual patient outcomes, but hospital staff will be in no doubt that services are being impaired. Speaking to Building, Midland Met trust’s chief executive Toby Lewis was at pains to say patients’ immediate safety is not at stake.
But A&E staff are having to work across two sites four miles apart, which inevitably creates inefficiencies, meaning money is being wasted maintaining critical services in the existing estate – the government has provided £15.4m of funding to keep things going until the single A&E department is finally ready. No wonder local politicians and patient groups are angry.
Arguably, the situation is worse in the dilapidated Royal Liverpool University hospital, which is prone to flooding from ageing pipework and has had to put up with broken lifts delaying the movement of patients around the building. Staff have gone on record to express their fears for patient care as a result of failing systems.
There is now a mood of impatience – what staff, lobby groups and politicians want is for these problems to be resolved as quickly as possible. While taxpayer money has to be protected, one Liverpool MP makes clear that if more unknown problems start to emerge, the government needs to just “find the money” to get the job done. Carillion’s name may be mud in these communities after what they’ve been through but let’s hope others being hired to sort out its mess can put things right, and fast.