Liverpool NHS trust to pay O’Rourke subcontractors direct

Trade contractors working on the stalled Royal Liverpool Hospital will be paid by the trust directly, to safeguard against a Carillion “situation” recurring.

Work on the project had been suspended after Carillion’s liquidation earlier this year. Last month, the Royal Liverpool and Broadgreen University Hospitals NHS Trust announced it would terminate the deal with Carillion PFI vehicle The Hospital Company, allowing it to appoint Laing O’Rourke to deliver the construction works.

However, the trust said that Laing O’Rourke was not prepared to take any cost or programme risk on the scheme. As a result, it has decided to bring in Mace to help manage the cost and construction timetable.

In its latest board minutes, the trust said: “The agreement with Laing O’Rourke is such that they will have a very different set of responsibilities to those carried by Carillion. Laing O’Rourke was not prepared to take any risk on either construction cost or timetable to complete – these risks sit with the trust which we will manage through Mace and the in-house project team.

“One key safeguard going forward is that the trust will make payments to Laing O’Rourke’s subcontractors directly. This means that should the same situation befall Laing O’Rourke as it did Carillion, then the trust would simply look to appoint a new contract manager. Subcontractors would continue to work and get paid as normal. While some delay may be inevitable, the subcontractors would be kept whole and there would be no risk to the project being completed."

The trust said it was currently working with Laing O’Rourke on the procurement process, which involves around 140 trade contractors who were previously employed on the site.

“Having all these contracts in place will not only help facilitate a swifter restart of construction, but means that where possible, the trust retains the warranties for the original works, as well as the completion works,” it added.

Laing O’Rourke started on site at Royal Liverpool Hospital on 12 November and has commenced a programme of early works that run until April 2019.

They will run in parallel to detailed design works that needs to be completed to implement the structural remedial works identified by Arup. Included within this, O’Rourke has been carrying out surveys of the building alongside architects NBBJ and Arup.

An initial phase of works, beginning on 3 December, will deliver a new security room, begin modifications to the ventilation system in the anaesthetic rooms, and provide access to areas of the structure requiring remedial works that were identified in Arup’s structural review.

A more detailed construction programme will be announced early in the New Year with handover expected for late 2020.

Aidan Kehoe, the trust’s chief executive said: “After such a challenging and turbulent time over the last 11 months, we are glad to see work begin back on the site and we are looking forward to the New Year with fresh optimism.

“With Laing O’Rourke and others in place, more contractors to follow in the coming months and work returning to the site, our staff are now refocusing their attention on our plans for moving in.”

Andy Thomson, Laing O’Rourke’s project director, added: “The team is now mobilising with important early work already underway. The pace of delivery will grow in the New Year and all involved are energised and committed to completing the new Royal for the people of Liverpool.