From the outside, the new Royal Liverpool Hospital is an impressive, sleek, modern building dominating the skyline from the east of the city centre.

But for the time being it remains a £335m empty shell - which we can reveal is still more than a year away from providing the world class healthcare the people of Liverpool need and deserve.

The stunning collapse of construction giant Carillion in January, the largest ever trading liquidation in UK history, has left a formidably complex mess for the Government, the NHS and private investors to unpick.

Today our special investigation looks at:

  • Who is really to blame for the delays in opening Liverpool's new hospital
  • How long the people of the city still have to wait for the Royal to open
  • The struggles of hard-working frontline staff battling failing facilities
  • What needs to happen now to bring an end to the saga

The Royal Liverpool Hospital as it stands today

Inside the old Royal, staff face catalogue of issues

As negotiations to find a new builder continue behind the scenes, NHS front-line staff struggle on in the dilapidated old hospital.

It is widely reported that the Royal Liverpool and Broadgreen University Hospitals Trust (RLBUHT) is in advanced talks with mega construction firm Laing O'Rourke – although neither party would comment on the rumours.

Whoever takes on the stalled project will also face complex repair work after cracks were discovered in concrete beams, which delayed construction before the collapse of Carillion.

The latest update from the Trust says work on the hospital will take at least 12 months from the date construction resumes.

Aidan Kehoe, chief executive of RLBUHT, said: “Carillion’s collapse has created an unprecedented situation with complex legal and financial issues to resolve and there are no quick or simple solutions.

“Throughout this time, we have been doing everything possible to establish an agreement between the various parties required to get construction restarted and our new hospital completed.”

According to healthcare union Unison, staff working in the Royal have reported a catalogue of concerning issues.

Members reported:

  • Weak WiFi signal meaning medicine carts have to be kept stationary, causing delays to the medicine rounds on the wards
  • Lifts that are out of order and have not been repaired for more than a year
  • Uneven floors with tape holding them down
  • The “appalling state” of the Duncan Building – including “bits of concrete falling off the roof and onto the car park”

    A broken lift at the Royal Liverpool Hospital
    A broken lift at the Royal Liverpool Hospital

Paul Summers, North West regional organiser at Unison, said: “There is just a general sense of decline, and staff have to work around problems with the buildings and facilities.

“It’s unfair that NHS staff and patients are having to put up with these conditions due to the failings of Carillion and of Private Finance Initiative (PFI).

“Carillion directors received huge payouts and have not suffered the consequences of their greed and incompetence. The government should now step in and ensure that the new hospital is built as soon as possible.”

In response to Unison's comments, the Trust stressed patients were still being treated in a “safe environment.”

A statement said: “We continue to carry out both emergency and planned maintenance across our hospitals to ensure that patients are treated in a safe environment.

"Whilst we recognise that the current building does not provide the high-quality environment that we want to treat our patients in, we work very hard to ensure that it is safe.

"We are keen – like all NHS hospitals – to spend taxpayer’s money wisely and this may mean that non-urgent or minor works are not carried out, especially in buildings that are due to be demolished. “However, we continue to risk assess areas regularly and have never stopped our programme of maintenance.

14-year battle to replace "Eastern Europe"-style old building

The current Royal Liverpool Hospital

Now widely considered a blight on the city, the old Royal building opened in 1978 and even at the time was not compliant with fire safety regulations, according to official documents.

In the late 1990s, significant problems began to emerge with the infrastructure of the hospital – causing a major headache for NHS bosses.

The Capitec Report, published in 1999, questioned the ability of the hospital's main block to provide healthcare into the 21st century, noting “intrinsic flaws” in its design.

Over the next few years it became increasingly clear that a revamp of the old building was not feasible, and in 2004 planning commenced on a new build.

Years of negotiation between the Trust, Liverpool City Council and the Department of Health followed as business cases were prepared.

Royal Liverpool hospital in numbers

£429m

Cost of building new hospital and demolishing the old

£124m

Taxpayers money already gone to the scheme

18 months

Time since original proposed opening date

12 months

Time to finish hospital, from moment work begins again

£83m

Carillion forecast losses on hospital project

£1.15bn

Carillion losses in six months to June 30 2017



In 2010 then Andy Burnham, then Labour Health Secretary, announced official government approval for a new state of the art hospital.

Mr Burnham referred to the existing building as a “little piece of Eastern Europe” and described a new hospital for the city as a “long standing aspiration.”

Andy Burnham

The same year bidding for the contract to build the new hospital began, and in 2012 Carillion fought off competition from Horizon to win the work.

Time Line

A Royal mess - where did it all go wrong for Liverpool's new hospital?

  1. 1978

    Original Royal Liverpool Hospital opens, under Crown immunity due to failure to comply with existing fire regulations

  2. 1999

    Damning Capitec Report questions ability of original building to provide health care into 21st Century, noting "intrinsic flaws" in design.

    Years of evaluations follow on whether a major refit of the current hospital or a whole new one will be more effective.

  3. 2004

    After years of evaluations, a Strategic Outline Case (SOC) prepared by local health bodies concludes that a new building is preferable to a major revamp of old building

  4. 2012

    Carillion beats Horizon to be selected to carry out the project, with the keys to the new site due to be handed to the Trust in March 2017

  5. December 2016

    Work halts on construction after cracks discovered in concrete beam

  6. March 2017

    Discovery of large quantities of asbestos on the construction site delays building further.

    The estimated handover date pushed back to Summer 2018.

  7. July 2017

    Two thirds wiped from Carillion's value after £845million write-down of construction contracts.

    CEO Richard Howson steps down

  8. November 2017

    Further profit warning issued with full year debts revealed to hit £925million

  9. January 14 2018

    Carillion collapses and is placed into compulsory liquidation, with liabilities totalling £7billion and a pension deficit of between £580million and £2.6billion

  10. January 15 2018

    The day after news broke of the collapse, MPs urgently debated how to handle the fallout in parliament

    The government's cabinet office minister David Lidington told MPs that the chief executive of the Royal - Aiden Kehoe - had stated that he saw 'no problem' with moving forward to the completion of the new hospital construction work in Liverpool.

  11. January 24 2018 - Concerns over payments

    Ten days after Carillion's collapse Liverpool Riverside MP Louise Ellman, who had already raised concerns about the completion of the hospital, told the House of Commons she was 'extremely concerned' subcontractors were not being paid for work.

    She said

Death of a giant

With a track record for delivering major developments in Merseyside, the choice of Carillion to head-up the new hospital project in 2013 was no particular surprise.

The company had been involved in the construction of private prison HMP Altcourse, and was later selected to build the 8,500 seater new main stand at Anfield football stadium.

The hospital development, including demolition of the old site, was set to total £429m and was due to be handed over to the Trust in March last year.

The Royal Liverpool as it looks today

But issues with asbestos, cracks in concrete beams and flooding delayed the handover by at least 12 months.

The delays, and associated costs, were an example of how the company's biggest projects were squeezing its cash flow and ability to service its debts.

Serious signs of distress began to emerge on July 10 last year, when Carillion announced a write-down of £845m, wiping two thirds from its value.

It was subsequently revealed that Carillion had lost an eye-watering £1.15billion in the six months up to June 30, 2017.

As a result it crashed out of the FTSE 250 index, five directors including CEO Richard Howson resigned, and Carillion desperately tried to claw its way out of a black hole of debt.

The dying company staggered on to the new year, before it was announced that Carillion would enter compulsory liquidation on January 15.

As the firm's 19,500 strong UK-based workforce awaited news on their jobs, the question of who was at fault dominated headlines.

The blame game

Immediately after Carillion hit the buffers, calls for accountability began to ring out.

A joint enquiry by the Work and Pensions and Business, Education and Industrial Strategy (BEIS) Parliamentary Select Committees revealed a damning catalogue of errors.

Seven former directors were hauled in front of MPs including Mr Howson, his replacement as CEO, Keith Cochrane, and finance director Zafar Khan.

Under a barrage of questions from select committee members, all of the former directors apologised but denied placing the interests of shareholders above Carillion's staff and customers.

They pointed to a raft of issues including the failure of Qatari clients to pay a £200m bill, Brexit, and spiralling PFI costs including the failure of concrete beams at the Royal.

But MPs suggested the board had been overly optimistic in valuing new contracts – overstretching the company in “a relentless dash for cash.”

In a joint statement after the hearing, committee chairs Frank Field and Rachel Reeves said: “This morning a series of delusional characters maintained that everything was hunky dory until it all went suddenly and unforeseeably wrong...

“Everything we have seen points the fingers in another direction – to the people who built a giant company on sand in a desperate dash for cash.”

A report published by the joint committees in March this year suggested the company's directors were “responsible and culpable” for its collapse.

In a savage assessment of the failures at the top, MPs said board members were ‘responsible and culpable’ through their ‘recklessness, hubris and greed.’

Birkenhead MP Mr Field said: “This is a disgraceful example of how much of our capitalism is allowed to operate, waved through by a cosy club of auditors, conflicted at every turn.

“Government urgently needs to come to Parliament with radical reforms to our creaking

system of corporate accountability. British industry is too important to be left in the hands of the likes of the shysters at the top of Carillion.”

Labour MP Frank Field
Labour MP Frank Field

Ms Reeves said: “Carillion’s collapse was a disaster for all those who lost their jobs and the small businesses, contractors and suppliers left fighting for survival.

“The company’s delusional directors drove Carillion off a cliff and then tried to blame everyone but themselves. Their colossal failure as managers meant they effectively pressed the self-destruct button on the company.”

A further, more in-depth investigation is underway by the Official Receiver, which was appointed to handle the liquidation of Carillion.

Since the process began in January, the Insolvency Service says 13,945 jobs, 76% of Carillion's pre-liquidation work-force, have been saved by transfer to new suppliers.

So far 2,787 workers have been made redundant while 1,272 left the business voluntarily either through retirement, new jobs or other reasons.

The Insolvency Service has confirmed that Carillion staff living in Liverpool, Wirral, Knowsley, Sefton, St Helens and Halton are among those made redundant.

Inside the new Royal - the pictures which hint at how things should have been

Back in September 2017 the ECHO was given a look inside the new building to see progress made so far. We were shown a striking reception and entrance area, along with virtually complete sections of the hospital and treatment rooms which looked ready to use.

The images we took that day show how the city's new hospital was within touching distance - only to be snatched away.

Staff Base on Ward 4A.
Staff Base on Ward 4A.
The Atrium.
The Atrium.
The Atrium.
The Atrium.

Moving forward

A spokesperson for the Trust told the Echo that “no-one is more disappointed than us” about not being in the new building.

But the Trust says negotiations are progressing well and says significant updates should follow soon.

Mr Kehoe said: “The government want to ensure that a deal is reached that secures best value for money for the taxpayer. Health Minister Stephen Barclay recently visited the new Royal and was impressed with what he saw.

"He has taken a keen interest in ensuring an agreement is reached and like all of us, wants to see construction started as soon as possible.

Chief Executive of Royal Liverpool University hospital Aidan Kehoe

“Since January, myself and other members of the Trust have taken part in hundreds of meetings and conference calls with our partners, pushing for a way forward. These discussions have progressed immensely and we are confident that a way forward will be agreed soon.”

A political battle

The responsibility for Carillion's collapse lies principally with the company and its directors - who have been held up for overseeing a 'reckless' culture that put profits before all else.

But in the weeks and months since the construction giant fell into liquidation, politicians from across the Merseyside region have continually and passionately called on the government to step in, take the lead and ensure that the people of Liverpool are provided with a new hospital as soon as possible.

As you can see from the timeline below - the responses have been less than impressive.

Time Line

The Royal - a timeline of government indifference

  1. January 15 - Louise Ellman MP

    The day after news broke of Carillion's collapse, MPs urgently debated how to handle the fallout in the House of Commons.

    The government's cabinet office minister David Lidington told members that the chief executive of the Royal - Aiden Kehoe - had stated that he saw 'no problem' with moving forward to the completion of the new hospital construction work in Liverpool.

    This rather casual sounding comment from the minister was not enough to convince Liverpool Riverside MP Louise Ellman, who said she was 'deeply concerned' about the future of the hospital.

    She asked: "When will the new arrangements be made and when will the hospital be completed? The people of Liverpool must not pay the price for Carillion’s failure."

    What came next was the type of tepid government response that Liverpool politicians would become accustomed to in the ensuing months - with Mr Lidington stating: "I refer her to the very strong words of reassurance from the chief executive of her hospital trust that things are in train to deliver the new hospital within the time that he was forecasting."

  2. January 24 - Louise Ellman MP

    It wasn't long until Ms Ellman - who has become a tireless campaigner on this subject - was raising her concerns about the hospital in her constituency in the Commons once again.

    During a debate, she said she was 'extremely concerned' about subcontractors not being paid for work, apprentices with uncertain futures, pensions at risk and workers facing the loss of their jobs.
    She also asked for a date to be provided for the completion of the work at the Royal - and talked of the 'complex web' of companies involved in the project and how this could affect a new contractor being appointed.

    She said: "When I raised this issue in the House previously, I was told by the Minister that the matter could be dealt with simply and that it was for the existing hospital to resolve, but that is not the case.

    "Assurances that the hospital will be completed are simply not enough. I want firm dates for when a new contractor will be appointed and when that new hospital will be open for business.

    "As a matter of urgency, the people of Liverpool need the services that the hospital will provide. Carillion’s collapse must not leave Liverpool in the lurch. I call on the Minister to give the answers, and to give them now."

    What came back was another unconvincing response - this time from disgraced former Small Business Minister Andrew Griffiths, who said: "That project, along with the other hospital projects, is a priority for the Government, and we are working incredibly hard to get them moving as quickly as possible. I will endeavour to keep her updated."

  3. May 23 - Mayor Joe Anderson

    After months without progress or hopeful responses, Liverpool's Mayor Joe Anderson sent a powerful letter to Theresa May - demanding a meeting with Health ministers and urging the government to step in.

    In his missive, the mayor accused the government of failing the people of Liverpool, saying the “fiasco” caused by construction giant Carillion’s collapse will mean the hospital eventually opens at least two years later than it was supposed to.

    Mayor Anderson said: “The Royal is a public service, pure and simple. It simply isn’t acceptable that it sits there gathering dust when the people of this city need - and deserve - a new hospital."

    “Sooner or later the Government needs to step in and fix this mess.
    “With a concerted effort, we can kick start the project and get it across the line.

    “The City Council stands ready to play our part, but this needs a ministerial intervention.”

  4. July 11 and 18 - Dan Carden MP

    The Walton MP took the fight directly to government in July, with two powerful interventions at successive Prime Minister's Questions.

    On July 11, after describing the unfinished Royal as a 'monument to corporate greed' - he said: "Hospitals are for treating the sick, not lining the pockets of investors, so instead of waiting for commercial lawyers and accountants, holding secret meetings with no public accountability, will the Government now call in this contract, buy out the investors and deliver a publicly owned, publicly run hospital for the people of Liverpool?

    After being told once more that the government was looking for 'a way forward' - he returned the following week and addressed the Prime Minister herself.

    He said: "Carillion forecast an £83 million loss on the Liverpool Royal Hospital, and physical cracks now exist in the structure’s concrete beams. "It is 16 months late, over budget and structurally unsound, but the answer to my question in the Prime Minister’s absence last week offered no solutions. Will she now take responsibility for finishing and opening the new Royal and guarantee that the spiralling costs will not fall to the hospital trust, which would cut the budget for patient care in Liverpool for decades to come?"

    But the PM - like her ministers before her - couldn't provide any real assurance or concrete answers, stating: "The Government and the trust continue to be in active discussions with the existing private sector funders to see whether there is a way forward to complete the remaining work on the hospital.

    "It has taken longer, and further issues were uncovered during the process, but the way that we are approaching the situation is the right way to ensure that we are clear about what we are dealing with. We want to make the right decisions, and it is right that those discussions continue."

'We have waited long enough'

Liverpool Riverside MP Louise Ellman

The above timeline offers just a snapshot of the relentless efforts of Liverpool's politicians to seek answers and action from the government over the future of the Royal - and to raise the concerns of everyone affected by the stalled of the project.

No one has taken the fight to the government more vehemently and consistently than Riverside MP Louise Ellman - who has raised the subject in Parliament on 18 separate occasions since Carillion's January collapse.

She is now calling on the government to act and act quickly to ensure the completion of the hospital that lies in her constituency.

She said: “It is high time the government showed a sense of urgency. The people of Liverpool must have their new hospital without any further delay.

Entrance gates to the £335m New Royal Liverpool Hospital are firmly locked
Entrance gates to the £335m New Royal Liverpool Hospital are firmly locked

Carillion’s failure must not leave the city without essential health and research facilities

“We fought a hard campaign to secure the building of the new hospital. Carillion’s collapse must not deprive this city of top class health services."

Pointing the finger of responsibility for the completion of the project firmly at Theresa May's government, she added: “We have waited long enough. The government must make sure a new contractor is appointed and a clear timetable is set for the completion of the new Royal.

“The building is 90% complete but without that final 10% finished it remains a monument to Carillion’s failure. That is unacceptable and it is the Government’s responsibility to find a solution .

“Since Carillion collapsed I have lobbied Ministers and investors hard to find a solution.

“It is high time construction restarted.”

'A classic Whitehall farce'

Mayor of Liverpool Joe Anderson

There is no doubt among anyone that the culture of 'recklessness, hubris and greed' that was allowed to pervade through Carillion's management is the ultimate reason for the company's demise and the delay in completing Liverpool's crucial new hospital.

The House of Commons' Work and Pensions Select Committee could not have been stronger in its criticism of the company’s business model, which it said was little more that “a relentless dash for cash, driven by acquisitions, rising debt and exploitation of suppliers."

But as Mayor Joe Anderson has strongly argued, the government must take plenty of responsibility for failing to intervene earlier. The committee said ministers had 'lacked the decisiveness or bravery' to address failures in corporate regulation, which allowed Carillion to become a 'giant and unsustainable corporate time bomb'.

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The Mayor said: "The people of Liverpool are being denied a badly-needed new facility because an unchecked culture of corporate greed was allowed to run amok for too long.

“These scathing criticisms are entirely deserved. But none of this deals with the issue on the ground for the people and places left to deal with Carillion’s mess.”

On the current situation at The Royal, the Mayor said: “The local hospital managers are doing their best in an unacceptable situation, but it seems that the Department of Health is content to tread water, letting the Royal – and other Carillion projects around the country – sit there and gather moss.

“It’s a classic Whitehall farce, with different government departments and other agencies, squabbling over the mess left by the sheer greed and incompetence of Carillion’s directors. Not to mention there is now an additional £100 million in funding to be found to sort the remaining work.

He added: “The Royal is a public service, pure and simple. The clue’s in the name: ‘National’. Ministers can’t shrug their shoulders and ignore the fallout from Carillion’s demise. Nor is it acceptable to leave a massive hole in my city’s healthcare provision. The people of Liverpool have waited long enough: They need – and deserve – their new hospital.”

'Symbolic of the North/South divide'

Amongst the raft of complaints made about the situation surrounding the Royal Liverpool Hospital is a sense that the lack of action and apparent dragging of Whitehall feet is in part because this hospital lies in Liverpool - and not further south.

This is a sentiment echoed by the Liverpool City Region Metro Mayor who said the debacle is 'symbolic of the North/South divide in this county.'

The Metro Mayor, who is aiming to bring key powers back to the city region with his new city region role added: " If the problems encountered had been experienced in London, a solution would have already have been found."

Mayor Rotheram praised the team at the Royal, who he said have been working 'tirelessly' to sort things out, adding that ultimately the government needs to 'step up to the plate' to ensure construction is completed immediately.

Steve Rotheram

He said: "The current situation is not just for the Trust to sort out. The former Secretary of State, Jeremy Hunt, should have taken personal responsibility for negotiations.

"Whilst financiers, potential contractors and other parties pick over the bones of the failed project, patients and staff are caught in the middle of a fiasco not of their making.

"This whole situation offers a snapshot of the fundamental imbalances that all too often pervade our country’s economy.

"On one hand we have the collapse of a multi-billion pound company that was seen by many as ‘too big to fail’ – and on the other, a London-centric government that looks with indifference at the plight of an entire city region desperately in need of a new hospital.

"The decades long fight for a new hospital to replace the Royal wasn’t because we didn’t like the design of a concrete monolith. It was because we needed a state-of-art facility to offer improved healthcare and clinical outcomes."

Ambulances outside the Royal Liverpool Hospital, on Merseyside.
Ambulances outside the Royal Liverpool Hospital, on Merseyside.

Lambasting the 'serious limitations' of PFI schemes - Mayor Rotheram said: "It is nothing short of a disgrace that, in the 70th year of our National Health Service, at a time when many of us are looking at the future of healthcare in this country with apprehension, we have the shining edifice of a brand new hospital – something that should inspire faith in a brighter future – standing empty and unused.

"Our communities, patients and staff deserve better and need this new, modern hospital opening its doors as soon as possible, so that our fantastic doctors, nurses and other professionals, doing their best in the current building, can be accommodated in the very best facilities available, deserving of the world class dedication, professionalism and compassion they show every day."

He added: "I am calling on the government to sit up and take note of the anger that is felt by many people in our city region and bring about a solution to this scandal as quickly as possible.”

'Public are in the dark'

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While the general consensus of local politicians is to lay blame at the door of the government and of course, Carillion, Walton MP Dan Carden has also raised concerns about the Trust itself.

In a letter sent to Chief Executive Aiden Kehoe - seen by the ECHO - Mr Carden suggested the latest updates from the Trust will not comfort the public - and intimated that the body's priorities are somewhat askew.

He wrote: "The Trust is clearly in an unprecedented situation.

"I have serious concerns about the ongoing process and you will know that I recently raised these during Prime Ministers Questions.

"The public need more than the ongoing assurances that a deal will be 'reached that secures best value for money for the taxpayer'.

"People want the new Royal to be opened, in the interests of the public, not the investors."

Mr Carden said he welcomed the Trust's update - but bemoaned a lack of detail that would help 'restore public trust in these discussions.'

As referenced in our timeline - Mr Carden has twice raised the Royal issue at Prime Minister's Questions - and confirms he has still had no answers forthcoming.

Fighting For Our NHS protest outside the Royal Liverpool
The Fighting For Our NHS protest outside the Royal Liverpool

His letter adds: "I made these interventions in order to seek transparency. My constituents feel like they have been kept in the dark throughout this process.

"The public no doubt understands the difficult circumstances the Trust is in, but after months of delays, public faith that their interests are being prioritised is eroding. I believe that the best way to get people in our city behind these negotiations is to involve the public in the conversation. "

Like others, the Walton MP believes the government should now step in - and the priority should be opening the new hospital.

He added: "Having seen for myself the building so near to completion, with state of the art medical equipment lying idle in empty wards, I know you will appreciate the sense of urgency.

"But routine updates lacking in significant new information and focusing on the interests of investors suggest that little progress is being made."