Royal Liverpool to review plans after damning report

The board of Royal Liverpool University Hospital will meet to agree a final programme, timescales and costs for the redevelopment, after a government report said it could be delayed by five years and cost more than double the original estimate.

The scheme, which started in 2014, was due to complete in 2017 but has suffered delays due to the collapse of its original main contractor Carillion, and a plethora of structural issues. The project is now expected to cost at least £724m, compared with £350m in the original business case, according to the report from the National Audit Office.

This includes an estimated £293m for remedial work to the structure and to complete the construction of the new 646-bed hospital in central Liverpool, which is intended to replace the existing buildings and create one of the largest emergency departments in the North West of England.

The project is expected to complete in autumn 2022, five years after the initial planned opening date of June 2017, the report added.

The Liverpool University Hospitals NHS Foundation Trust, which owns and manages the hospital, has yet to set a new opening date since Carillion went into administration in January 2018.

“Progressing the construction and remedial works with a sense of urgency remains our absolute focus to enable us to deliver a hospital of the highest standards, with a working environment that supports our excellent staff in delivering exceptional care for our patients,” the trust’s chief executive Steve Warburton said in a statement on Friday.

The NAO’s conclusions match Warburton’s comments to Place North West in December, when he said the stalled scheme required an additional £300m of funding and would be further delayed. “People are likely to be at the existing hospital for the next three winters, opening in 2022,” he said.

The hospital is planned to have 646 hospital beds, a 40-bed critical care unit and 18 operating theatres.

Carillion had pushed back completion from 2017 to February 2018, and then again by several months, after it found cracks in concrete beams and asbestos in the ground. Since the contractor went into administration, further issues were uncovered during a structural review by Arup in 2018, including that the cladding on the building was unsafe, which has added extra costs and time to the scheme.

Laing O’Rourke is the new main contractor and the trust launched a tender this month, valued at between £10m and £20m, for a contractor to remove and replace the faulty cladding.

Additional proposals to demolish the old hospital and create an underground car park and public plaza, were not included in the original scheme and are currently unfunded.

The NAO’s report also examines the impact of Carillion’s collapse on another much delayed private finance initiative (PFI) project, the Birmingham Midland hospital redevelopment.

The report reveals that the Department of Health had to pay £42m in compensation to Royal Liverpool’s investors to terminate the PFI contract.

“We welcome the NAO’s report and its findings, which highlight in detail how Carillion’s collapse had far-reaching consequences for the new Royal project,” Warburton’s statement said.

“The report illustrates the complexities and complications faced by our predecessor organisation, the Royal Liverpool and Broadgreen University Hospital Trust, at the time of Carillion’s demise, and the efforts needed to get work on site restarted.

“We will continue to work closely with the Department of Health and Social Care, HM Treasury, and NHS England and NHS Improvement on taking the action required for project completion at the best possible value for taxpayers.”