Liquidation announcement leads to calls for reassurances over NHS hospital PFI contracts
Fourteen NHS hospitals are affected by news this week that Carillion, one of the country's largest PFI operators, has gone into liquidation.
An announcement was made by the construction giant on Monday, revealing that a winding-up order had been made against it and a number of sibsidiary firms in the group.
The Official Receiver has been appointed by the Court as liquidator and is now responsible for the day-to-day control and management of the liquidated companies. Partners at PwC have been appointed as special managers to assist.
The news affects 14 hospital projects across the UK, both where Carillion has been appointed as main contractor under a PFI contract, and hospitals which have already opened but are subject to ongoing estates and facilities management contracts of up to 30 years, covering services including catering, cleaning, maintenance and portering.
Hospital construction contracts currently underway and affected by the announcement include the Midland Metropolitan Hospital and the Royal Liverpool Hospital, although the Government has said these will continue in the meantime.
While the NHS isn’t a particularly large customer of Carillion, we have a duty to maintain safe, high-quality services for our patients. That’s why we’ve been working with trusts and with private sector providers to have extensive contingency plans in place
Hospital projects are worth over £200m to the company, making it one of the largest providers of facilities management to the NHS.
These contracts employ more than 8,000 people and its engineering teams carry out around 200,000 planned and reactive maintenance tasks to maintain operations covering around one million square metres of space.
Following this week's news, all these contracts will have to be re-explored.
NHS Improvement said contingency plans had been in place for some months and that the majority of Carillion employees had turned up for work as normal.
A spokesman said: “While the NHS isn’t a particularly large customer of Carillion, we have a duty to maintain safe, high-quality services for our patients. That’s why we’ve been working with trusts and with private sector providers to have extensive contingency plans in place.
“That these plans have worked well is a tribute to the tireless work by NHS staff and by staff employed by Carillion, who have put huge amounts of effort in at what is a very difficult time for them.”
But Labour leaders and the British Medical Association are calling for further clarity about how services will continue moving forward.
Dr Chaand Nagpaul, chairman of council at the British Medical Association, said: “We urgently need government to provide clarity around what happens next and assurances that the hospitals affected will continue to be able to provide high-quality services for patients.”
Among the hospitals affected by the news is the £23m Harplands Hospital, a mental health unit in Hartshill.
Carillion constructed the building, which it then leased back to North Staffordshire Combined Healthcare NHS Trust (NSCH), although the firm later sold its equity in the project to Land Securities Trillium in 2007.
But, as in many cases, Carillion retained its 29-year concession to provide facilities management at the hospital.
We urgently need government to provide clarity around what happens next and assurances that the hospitals affected will continue to be able to provide high-quality services for patients
Following the announcement, NSCH says these services will continue, with discussions taking place to secure a long-term solution.
A spokesman said: “Our top priority is to keep services running safely for patients.
"Alongside NHS Improvement and our local partners, we have planned extensively for this scenario and will aim to keep any disruption to a minimum.
“This announcement does not involve any staff directly employed by North Staffordshire Combined Healthcare. We are also well aware of the concerns that staff employed by Carillion will have at this point and we thank them for their continued hard work.
“We are talking to them via their line management. We have sought and received reassurance that arrangements are in place to ensure staff will be available to deliver the services we require.
“The services provided to our trust by Carillion are primarily concerned with facilities management at Harplands Hospital, not direct medical treatment."