Whittington’s £30m PFI deal collapses
PFIs were a main policy plank of Tony Blair's government
06 October, 2020 — By Tom Foot
The Whittington Hospital
A £30million Private Finance Initiative (PFI) hospital deal has collapsed after a construction firm went bust. Whittington Facilities Ltd (WFL) – set up in 2003 to build and maintain the main Whittington hospital building until 2034 – has filed for administration.
The collapse of the PFI company means the main building in Magdala Avenue has transferred back into the ownership of the NHS trust that runs the hospital in Highgate. But the trust is now responsible for maintenance of the building, including the cost of major fire safety refurbishments it had been pursuing the PFI company for under terms of a 30-year contract.
A spokesman for the hospital said there would be no impact on patient care but a report to the board said the trust was now “fully responsible for all aspects of fire safety in these buildings”.
Accounts for Whittington Facilities Ltd showed that it had been in a two-year dispute with the Whittington NHS trust over who should pay for a “major fire safety project”, following a blaze in the basement of the main building in 2018.
The fire came in the year after the Grenfell disaster and the Whittington had wanted funding for security guards, fire wardens and extra fire drills until the safety works to remedy “fire defects” were complete.
Despite financial tensions, WFL’s most recent press notice in 2019 said it had been “delighted to have supplied the outdoor Christmas tree for Whittington Health”.
In its last published accounts, Whittington Facilities – which is backed by a major investment firm – said: “The company is working in partnership with Whittington NHS trust to formulate a plan to rectify the defects … The directors believe there is a reasonable prospect that cash outlays will be required which casts doubt on its future ability to trade.”
The 30-year PFI deal – one of several imposed on hospital trusts and a key policy plank of Tony Blair’s years as prime minister – was supposed to last until 2034 and only at that point would the building’s ownership be transferred over to the trust. The new UCLH hospital was also rebuilt in this way.
A Whittington statement said: “In late July, the company running the Public Finance Initiative (PFI) part of our hospital building went into administration. The ownership of the building has now reverted to the Trust. The fact that this company has gone into administration will have no adverse effect on patient care at Whittington Hospital. It does not change how we are currently working, and our patients and colleagues can be reassured that Whittington Hospital and all of our services remain open and safe for patients and staff.”