Ministers to cancel €335m Liverpool hospital deal

By Mark Kleinman, City editor
Ministers are to step in to bail out Liverpool's new ?335m ?NHS hospital, nine months after the collapse of construction giant Carillion left the project in crisis.
Sky News has learnt that the government will make an announcement within days that it is terminating the Royal Liverpool Hospital (RLH) private finance initiative (PFI) deal and taking it into full public ownership.
The trust responsible for the hospital is due to hold a board meeting on Tuesday, with a statement from ministers potentially timed to coincide with it.Private sector contracts relating to the project are due to expire before the end of the month, meaning the announcement has to be made by the weekend, according to industry sources.Matthew Hancock, the health and social care secretary, is understood to have ordered officials to end the impasse surrounding the construction of the hospital, which had been due to open last year.Although it leaves taxpayers facing an additional financial burden from Carillion's demise, the decision should expedite the delivery of a flagship new hospital in Merseyside.The government's decision to take temporary charge of the hospital's construction - with new contracts being tendered in the coming months - is likely to refuel the intensifying political debate about the role of private sector outsourcers in the delivery of essential public services.An announcement about the future of the RLH could come ahead of the Labour leader Jeremy Corbyn's speech to the party's annual conference in Liverpool, in which he is expected to continue his sustained attack on public-private partnerships (PPP).Mr Corbyn described Carillion's liquidation in January as a "watershed moment" for public services in Britain, and demanded that they be run "for the benefit of the many, not the profits of the few".A number‎ of other Carillion's major construction projects also remain unfinished, while the Midland Metropolitan Hospital in Smethwick has already been taken into public control.If ministers do opt to take over the RLH, the decision will leave its private sector lenders - Legal & General (L&G) and the European Investment Bank (EIB) - ‎nursing multimillion-pound losses.
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