The construction of the new Midland Metropolitan hospital and the extension to the Royal Liverpool University hospitals were funded by Private Finance Initiatives (PFIs) and were being built when Carillion collapsed in January 2018. Both construction projects were not able to attract private re-financing and in mid-2018 the PFI contracts were cancelled and HM Treasury stepped in to fund their completion.
This investigation will examine: government’s contingency planning for the hospital projects before the Carillion collapse and its response afterwards; the termination of the PFI contracts; and the subsequent letting of the new contracts. It will also assess the expected eventual costs of the two hospitals.
We reported on government’s handling of the collapse of Carillion in June 2018 and noted that in 2017 Carillion and its auditors had expected losses of over £130 million on the two hospitals.