Carillion collapse reveals 'long term failures' by the Government

Carillion collapse reveals ‘long term failures’ by the Government

The collapse of Wolverhampton-based Carillion has exposed “long term failures” by the Government, a damning new report finds.

Carillion had been employed to build the new 669-bed Midland Metropolitan Hospital, but its collapse left the project in limbo.

The hospital will replace key services at City Hospital in Birmingham and Sandwell Hospital.



The Midland Metropolitan Hospital building site

Work was halted when Carillion folded in January – and NHS managers have warned the half-finished building is suffering damage thanks 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.

Black Country MP John Spellar (Lab Warley) urged the Government to let the NHS manage the construction of the hospital.



John Spellar MP
John Spellar MP

He said: “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.

“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 hospital 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. However, there is still no sign of building work starting up.

The hospital was expected to cost £350 million but the delays have pushed up the cost by an estimated £125 million.

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