The sudden collapse of offsite construction specialist Merit has sent shockwaves through the UK’s healthcare infrastructure pipeline.
Merit went into administration at the end of 2025, leaving several major NHS projects stalled or uncertain, saddling creditors and taxpayers with around £25m of debt and resulting in the loss of approximately 300 jobs.
In November of last year, Merit Holdings and its subsidiary Merit Health appointed administrators amid mounting financial pressures triggered by a winding-up petition by HM Revenue & Customs.
The company’s collapse has left unsecured creditors owed significant sums, and many suppliers are now unlikely to be repaid.
Industry filings indicate that unsecured debts and liabilities have left a shortfall of around £25m.
Administrators are currently assessing the company’s remaining assets and ongoing contract obligations.
Job loss within healthcare manufacturing
Around 300 employees, many specialists in healthcare offsite manufacturing, lost their jobs as operations wound down.
These redundancies come at a time when the construction and modular manufacturing sectors are already under pressure from skills shortages and higher tender prices.
What NHS projects are now stalled or uncertain?
The wider repercussions extend far beyond staffing.
Multiple NHS infrastructure projects that Merit was engaged on are now facing disruption, reassessment or interim replacement contractors.
The key affected NHS projects include:
Berwick Community Hospital — Northumberland
Merit was the lead contractor on the £33m Berwick Community Hospital, a flagship project for Northumbria Healthcare NHS Foundation Trust.
Work was brought to a near standstill when the company entered administration, forcing the Trust to bring in the interim contractor Opus Building Services to stabilise the construction and re-employ much of the onsite workforce while a permanent replacement builder is sought.
NHS Medicines Manufacturing Centre — Seaton Delaval
Merit had been contracted to design and fit out a new NHS Medicines Manufacturing Centre, a facility intended to produce chemotherapy and other critical medicines for the North East and North Cumbria.
The collapse has thrown delivery timelines and continuity of production infrastructure into uncertainty, with the Trust now actively reviewing next steps.
Hybrid theatre and MRI facility — York Hospital
Merit was appointed by the York and Scarborough Teaching Hospitals NHS Foundation Trust to deliver a £8m hybrid theatre and MRI diagnostic centre.
Construction components were underway in Merit’s factory, and the project is now under review to assess completion risk and alternate suppliers.
Same Day Emergency Care Unit — Bedford Hospital
The company delivered a £3.6m Same Day Emergency Care (SDEC) unit for Bedford Hospital, to reduce pressures on emergency departments by offering rapid assessment and treatment spaces.
Construction began in early 2025, and Merit’s offsite-manufactured structure delivered and installed the unit on site in about eight months.
With Merit now in administration, any future maintenance or upgrades will need to be reviewed and potentially renegotiated with new contractors.
Norfolk Community Health modular unit — Norwich Community Hospital
Merit was appointed to design and deliver a 48-bed modular unit for the Norfolk Community Health and Care NHS Trust within 5 months.
The £19.2m Willow Therapy unit opened in September 2025.
Like others, this scheme now faces uncertainty around any future maintenance or upgrades that may be subject to review or renegotiation with new contractors.
Elective Care Hub — Solihull Hospital
In 2024, Merit delivered five crucial Air Handling Unit (AHU) PODS and two Substation PODS for Solihull Hospital's £25m Elective Hub (Operating Theatre Block) project.
These milestones had been achieved on the Elective Care Hub at Solihull Hospital, which was on track to expand theatre and treatment capacity.
While much of the modular fit-out had been delivered before Merit went into administration, the ongoing risk to completion and integration remains a concern.
What does this mean for the NHS?
For the NHS, which increasingly relies on offsite construction to deliver facilities faster and with reduced disruption, there is now added pressure to review contractual risk, ensure continuity of critical infrastructure delivery and protect frontline healthcare capacity from supply-chain instabilities.
Trusts and procurement bodies are likely to explore contingency frameworks and alternate modular manufacturing partners, while stakeholders continue to assess the knock-on effects on the national healthcare capital programme.