‘Long-term failures’ of Government are highlighted by the collapse of Carillion Report damns cost-cutting approach to contracting as work on Midlands hospital remains in limbo
THE collapse of Wolverhampton firm Carillion has exposed “long-term failures” by the Government, a damning new report finds.
Among Carillion’s many projects was the new 669-bed Midland Metropolitan Hospital, but its collapse has left the project in limbo.
The hospital was designed to replace key services at City Hospital in Birmingham and Sandwell Hospital.
Work was halted when Carillion folded in January – and there is still no sign of work restarting.
NHS managers have now warned that the half-finished building is suffering damage due to freezing ice and snow followed by scorching summer temperatures.
A report by the Public Administration and Constitutional Affairs Committee concluded that Carillion’s collapse exposed fundamental flaws in the Government’s approach to contracting.
It found that the Government’s determination to cut costs meant it paid contractors less than the cost of the services they were supposed to be providing.
John Spellar, Labour MP for Warley, has now urged the Government to let the NHS manage the construction of the hospital.
“This report from a Conservative-led committee has real lessons for health ministers and the Treasury as they consider the future of the Midland Metropolitan Hospital,” he said.
“They must realise that the cheapest offer will often not end up being real value for money and should give serious consideration to taking the operation of the hos- pital back into NHS and get a move on with getting a new contractor on site.
“This has gone on far too long and would not have been tolerated if the hospital was in London.”
Liz Truss, the Chief Secretary to the Treasury, last week visited the West Midlands and spoke to health managers about resuming construction of the hospital – but there is still no sign of building work starting again.
The hospital was expected to cost £350million but the delays have pushed up the cost by an estimated £125 million.