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News archive - March 2018

Carillion collapse hits NHS trusts

Carillion collapse hits NHS trusts

Fourteen NHS hospitals have been directly affected by news that contractor, Carillion, has gone into liquidation.

An announcement was made by the construction giant in January, revealing that a winding-up order had been made against it and a number of subsidiary firms within the group.

In 13 NHS trusts, Carillion was subcontracted to operate some services through the hospital’s PFI provider company, providing building maintenance, catering, and cleaning services, for example.

Three of the trusts also had direct contracts with Carillion to provide services such as car park management.

And both The Royal Liverpool and Broadgreen University Hospitals NHS Trust (RLBUH) and Sandwell and West Birmingham Hospitals NHS Trust had deals with Carillion to build new hospitals.

Managing contracts

Work on these hospitals is continuing for the moment, according to the Government, but delays are expected.

There are also a number of GP and community services in buildings with maintenance and cleaning subcontracted to Carillion.

A spokesperson for the Department of Health and Social Care said: “NHS Improvement has been helping trusts with planning and will continue to work intensively with trusts over the coming days. We will continue to support all organisations involved to minimise disruption.”

Commenting on the crisis, experts at healthcare law firm, DAC Beachcroft, said: “Typically, the type of public sector contracts which Carillion services are complex, large and over-threshold for procurement purposes. Replacing them at short notice could, therefore, be problematic.

“What will become of the existing contracts and assets owned by Carillion remains to be seen and until more is known in many cases this will remain ‘business as usual’; but this should not stop public bodies making plans now for contingency measures as replacements will be needed at some point.”

And the LIFT Council in a speech early last month said that, despite Carillion’s collapse the NHS estate would require support and investment from ‘responsible representatives’ of the private sector moving forward.

Value for money

Council chairman, Chris Whitehouse, said support of the private sector would be vital to help modernise the NHS estate and aid the £10billion investment committed by Chancellor Philip Hammond in November’s Budget.

He added: “There is an understandable hesitancy about the role of the private sector in delivering public services and infrastructure given recent events. But it’s important to remember that the LIFT model has been proven over nearly two decades, has delivered more than 330 fit-for-purpose buildings, and generated more than £2.5bn of investment in the primary care estate.

“These premises allow for the delivery of a multitude of services, ensuring patients get the care they need without resorting to acute settings, and delivering value for money to the health service.”

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