Sunday 6 October 2019 2:32 pm

Carillion saga continues: Watchdog probes Whitehall salvage attempts on unfinished hospitals

Britain’s public spending watchdog is to launch in investigation into Whitehall’s attempts to rescue two major hospital projects which ground to a halt when Carillion went bust last year.

The unfinished Midland Metropolitan and the Royal Liverpool University hospitals were left hanging by a thread when the outsourcer collapsed in January 2018, eventually lumping taxpayers with the cost of building them.

Read more: Government outsourcers are still struggling with growing debt piles

The projects were funded by the private finance initiative (PFI) model, a way of funding public projects through the private sector. 

Attempts to refinance them proved futile last year, however, and the Treasury was eventually forced to cough up to pay for their completion.

PFI was used extensively to pay for building hospital projects and other infrastructure like roads in the late 2000s and early 2010s. 

However, it has since fallen out of favour with the Conservatives and Labour.

The National Audit Office will probe the government’s contingency planning on the contracts, as well as its attempts to get them back on track.

It comes after the NAO last year declared Carillion’s collapse would cost the taxpayer £148m, in a wide-ranging investigation into the dramatic failure of the government outsourcer.

The government has struggled to find contractors willing to finish the loss-making hospital projects. 

NHS bosses in Sandwell told local paper the Express and Star over the summer that they are still waiting for officials to approve Balfour Beatty, the UK’s biggest construction firm, to build the £475m Midland Met.

The company has been getting the site ready for new work to kick off, and was the only bidder for the project.

However, no construction work has taken place since Carillion collapsed, delaying the hospital’s opening by three years to 2022.

Read more: Carillion collapse leaves taxpayer on the hook for nearly £150m

Royal Liverpool, on the other hand, was meant to open in March 2017. 

Neither of the hospital projects were mentioned by Boris Johnson when he announced he would build 40 new NHS centres at the start of the Tory party conference last month.