Background to the report
This report is about what happened to Carillion’s two major public sector construction contracts after it collapsed and how the Private Finance Initiative (PFI) operates in these circumstances. Carillion plc went into liquidation on 15 January 2018. In June 2018 we reported how government worked to ensure continuity of the public services operated by Carillion during the liquidation. But Carillion’s construction contracts stopped. At the time, Carillion was the main construction contractor for two new hospitals, both being built under PFI:
- the Midland Metropolitan Hospital in Sandwell, West Midlands (Midland Metropolitan). This is to be used by the Sandwell and West Birmingham Hospitals NHS Trust (referred to in this report as ‘the Sandwell Trust’ or ‘the Trust’ as appropriate); and
- the Royal Liverpool University Hospital (Royal Liverpool). This is to be used by the Liverpool University Hospitals NHS Foundation Trust, which was formed on 1 October 2019 through a merger between the Royal Liverpool and Broadgreen University Hospitals NHS Trust (referred to as ‘the Liverpool Trust’ or ‘the Trust’ as appropriate) and another NHS trust.
Content and scope of the report
The investigation focuses on the role of central government and the Trusts in relation to the two hospital projects before, during and after Carillion’s failure in January 2018. It sets out:
- the construction problems on each project (Part One);
- how the government and the Trusts dealt with the effects of the collapse of Carillion (Part Two); and
- the impact on the schedules and costs of the two projects (Part Three).