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Background

The vision for the new Royal was not a just to replace an out-dated building with a more modern and welcoming one. It was about creating a completely different kind of hospital at the heart of a radically renewed and improved local health service.

This concept aligned with national and local priorities to deliver more care outside hospital, whilst ensuring the new Royal became a world class facility for urgent and specialist treatment. Approval for the new Royal was supported by local health commissioners, Liverpool City Council and the Department of Health (as it was called at the time).

They all recognised the need to replace the current Royal but also the opportunities for the new Royal to be the catalyst to transform health and prosperity in Liverpool. 

The original cost for building the new Royal was £335m. Funding would come from Private Finance Initiative (PFI) with around three quarters of the funding coming from public sources including the European Investment Bank, the Department of Health and the Trust. Under the original deal, the annual repayment would be less than 6% of Trust’s income compared to 15 to 20% of earlier PFIs.

The contract for the new Royal was signed by the Trust and developers Carillion in December 2013. The firm were awarded the tender following a detailed and extensive bidding process, set by national guidelines, and following approval from the Department of Health and Treasury.

The proposed design submitted by Carillion was regarded as the better solution on the analysis of the qualitative evaluation, particularly as it allowed for more efficient movement of patients within clinical areas.

When Carillion joined the bidding process for the new Royal, they were one of the world’s biggest construction firms, well known for building roads, schools and hospitals across the UK.

Construction - Carillion

Construction on the new Royal began on 3 February 2014 and was originally scheduled to be completed by March 2017.

The official turf cutting was carried out in March 2014 by Liverpool Mayor, Joe Anderson, alongside Chrissie Hyland, who has worked at the hospital for over 40 years and Vicky Horsley a former patient at the Royal and Alder Hey.

In December 2015 the new Royal ‘topping out’, ceremony was performed by the Deputy Lord Mayor Cllr Roz Gladden.

However the project was delayed, according to Carillion, due to issues regarding the removal of asbestos from the ground, strong winds affecting the use of cranes and structural issues with a number of beams.

A revised completion date of February 2018 was provided by Carillion, however at the end of November 2017 they informed the Trust that they would be unable to meet this date.

By 2018, the exterior of the hospital was largely completed and the focus had been on finishing the interior. When Carillion entered into liquidation in January 2018, a new completion date had not been provided and all work on the new Royal came to a halt.

Following Carillion’s collapse

Responsibility for delivering the new Royal, lay with The Hospital Company (Liverpool), who were the private finance consortium of main lenders that contracted Carillion as construction partner. The contract with The Hospital Company (Liverpool) remained in place and they remained responsible for finishing the new Royal.

The collapse of Carillion created an unprecedented situation with numerous complex legal and commercial issues to resolve. There followed months of negotiations between the Trust, the Hospital Company (Liverpool), government departments, legal teams and contractors. All parties had been committed to getting an agreement that enabled construction to restart as soon as possible.

Support from local politicians, our staff and patients has been fantastic, By 30 September 2018, the Trust had an agreement in principle with The Hospital Company (Liverpool) on the way forward for the new Royal.

The 2013 PFI agreement was terminated and responsibility for completing the new Royal was transferred from the Hospital Company to the Trust, with the backing of the Department of Health and Social Care. This meant the new Royal was brought entirely into public ownership and would no longer be a PFI scheme. 

Construction – Laing O’Rourke

Laing O’Rourke took over as management contractor and began work on the site in November 2018.

At this stage the majority of work had been completed, but remedial works were needed on structural issues with beams and some external cladding needed replacing.

Laing O’Rourke will be providing a detailed construction programme and we expect this will set out a timescale for handover towards the end of 2020.

We are currently working with Laing O’Rourke through the procurement process, with around 140 works package 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. 

Dated: January 2019.