Contractors claim NHS trusts are stalling over project sign-offs because of anxiety about energy rule changes
Three contractors face delay in reaching financial close on PFI hospitals because of uncertainty surrounding changes to energy efficiency regulations.
Carillion’s £200m Portsmouth scheme, Skanska’s £265m project in Mansfield, Nottinghamshire, and the Balfour Beatty-led £520m scheme in Birmingham were all due to reach financial close this summer or autumn. But the firms now face delay because the NHS trusts involved fear that they will be involved in extra expense if Part L of the Building Regulations is changed after the contracts have been signed off.
The government is yet to publish revised guidelines for Part L, which has made the industry increasingly disgruntled as revised documents were due to be published before the summer parliamentary recess at the end of last month.
One senior Whitehall source said that the issue had risen to the surface as the business case for the Portsmouth scheme was now with the Treasury for sign-off. The source said: “The trusts are nervous; they don’t want to reach financial close and then find the designs are nowhere near meeting government rules on carbon emissions.”
The source added that the contractors had become increasingly frustrated with the trusts as they were demanding more and more changes to designs. He said: “This is all costing the taxpayer hundreds of thousands of pounds.”
Joyce Bradley, University Hospital Birmingham Trust project facilitator, said that Balfour Beatty’s project had been due to reach financial close in March. She said: “The Balfour Beatty consortium has only just gone to the rating agency to obtain a value of the project’s financial bonds. We’re certainly aware of the problems with the Building Regulations but we’re not stalling the project.”
Peter Coates, the Department of Health’s head of private finance, said that the issue was a matter of negotiation between the individual trusts and the consortiums.
He said: “The contractors will put designs on the table and it is up to the trusts to decide whether they are happy with them or not.”
A Skanska spokesperson said: “Skanska is aware of speculation surrounding alterations to Part L.
We can confirm that designs for Mansfield fully conform to the latest energy efficiency standards.”
Sherwood Forest Hospitals NHS Trust in Mansfield was unavailable for comment.
Portsmouth Hospitals NHS Trust said the trust had confidence in the deal that had been submitted.