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PFI project needs further consideration, say MPs

MPs have recommended that the government give further consideration before going ahead with a £470 million hospital building project, which has selected its final two bidders.

Carillion and the Horizon Consortium, which includes Interserve and John Laing, were named as the final bidders on the new-build contract for Royal Liverpool and Broadgreen University Hospitals NHS Trust in July.

The Treasury Committee used the hospital procurement as a case study in today’s report on PFI, which asks the government to “give further consideration before proceeding with the procurement in its present form” because of concerns over value for money.

The report points out that the value for money assessment calculated that the Liverpool hospital PFI could provide a benefit of 0.03 per cent compared to conventional procurement. “We are surprised about the supposed precision of this comparison given the inherent uncertainty in any long term investment decisions, and we are also concerned about some of the assumptions behind the VfM assessment,” the report says.

A Treasury spokeswoman said it would respond to the MPs’ report by around October.

Tony Bell, chief executive of the Liverpool Trust, said: “Our Outline Business Case has been scutinised and approved by the Treasury and the Department of Health.

“The Secretary of State for Health stated that he continued to support PFI schemes on a recent visit to Liverpool, when he confirmed Deeds of Safeguard would be made available.

“We are well-advanced with the procurement of the new Royal Liverpool University Hospital, having recently short-listed our bidders down to two. We are continuing to work with our bidders to develop our world-class new hospital for the people of Merseyside and Cheshire.”

An Interserve spokesman said: “We are aware of the Treasury Committee’s report. Interserve has built a solid reputation in the PFI field, and we are in regular and constructive dialogue with our public sector partners to ensure value for money.”

Carillion and John Laing declined to comment.