Who actually owns the new Royal hospital now?

Carillion collapse has delayed flagship project again

by

Alistair Houghton 12:23, 28 JAN 2018

CARILLION’s collapse has delayed the opening of the Royal Liverpool Hospital and plunged its future into uncertainty – but who actually owns the unfinished hospital complex?
Troubled building giant Carillion went into liquidation earlier this month after struggling with £900m in debts and a £590m pension deficit.
Carillion’s collapse has focused attention on controversial PFI deals, where building work on public projects is outsourced.
Many critics say such deals offer bad value for money and Labour has said it will reassess such deals if it wins power.
PFI deals have also been criticised for lacking accountability. The official handover of the hospital had already been delayed three times by Carillion, with even Royal boss Aidan Kehoe left unsure when it would be finished.


In the House of Commons last week Liverpool Riverside MP Louise Ellman , whose constituency includes the hospital, said: “I appreciate that this is a private sector collapse, but there are major questions for the government and regulatory bodies to answer. This is about public services!”
The hospital is being delivered by the Hospital Company (Liverpool), which in turn hired Carillion. The company is now working with PWC, which is managing Carillion’s liquidation, to decide what happens next.
Royal bosses say the hospital will be completed because the Hospital Company has a range of contingency plans available, including the ability to terminate existing contracts and to hire a new builder. The company also has access to insurance funds to help it finish the work .


The company will report to the Royal Liverpool and Broadgreen University Hospitals NHS Trust board this week.
But while those contractual complexities have still to be ironed out, Liverpool residents may at least be relieved to know that the hospital building itself IS owned by the NHS.
The Royal Liverpool and Broadgreen University Hospitals NHS Trust owns the new Royal in the same way a homeowner paying a mortgage owns their house.


The Hospital Company (Liverpool) has securities over the building, just as a bank would have securities on a house for which it had given a mortgage.
But the building is owned by the trust – and when the trust has made all its payments, then it will own the hospital outright with no conditions.


The trust had to repay the fixed £335m cost for the hospital over 30 years. Those payments were due to start last year, when the hospital was originally to be handed over.
But the trust does not have to start making its annual payments until the hospital is handed over and an independent tester agrees the building is complete.
The trust explained this month: “ So while this handover is deferred the overall cost to the Trust will be less.”