AN NHS trust has had to go to the High Court to uphold its decision to end the PFI contract for an unsafe £75 million mental health hospital.
About 50 patients at Roseberry Park in Middlesbrough, which opened just eight years ago, have had to be relocated due to fears over serious defects in the hospital’s fire safety systems.
Adult inpatient services have been moved to Sandwell Park hospital in Hartlepool, a half-hour drive or 40-minute train journey from Roseberry Park.
The 365-bed facility also has a significant number of other construction defects, including problems with its plumbing and roof, and will need remedial work on each of its buildings.
Tees, Esk & Wear Valleys NHS Foundation Trust has taken PFI company Three Valleys Healthcare and funder Bank of Scotland to the High Court to uphold its decision to end the contract, which would cost £321m by its planned end in May 2038.
The hospital has also been hit by the recent collapse of outsourcing giant Carillion, which maintained the hospital under the PFI contract.
PFI (private finance initiatives) became widespread under New Labour as a way of raising finance for public-sector schemes, committing the British taxpayer to huge future payouts over the life of lengthy contracts held by investors, builders and service providers.
In the High Court today Adrian Williamson QC, for the trust, said that terminating the contract was “not a step any trust will take lightly” and would only occur when “a project is in considerable disarray or worse.”
He gave the example of the heat in the hospital’s laundry room, identified as a concern in June 2015, which he said posed a danger to staff and patients.
The trust has had to employ on-site fire wardens and provide extra fire training to staff while it moves patients to other sites in stages.
After visiting the hospital in January, Middlesbrough MP Andy McDonald said the “almost cavalier attitude to proper construction standards” at Roseberry Park had “echoes” of last year’s Grenfell Tower fire disaster.
The trust filed notice of termination of the contract last June and is seeking a declaration from the High Court that the termination notice is valid.
But Bank of Scotland says the trust did not make clear what amount was required to be paid to the trust to avoid termination of the contract, making the notice invalid.
David Sears QC, for the bank, said that the “drastic step” of terminating the contract would have “drastic consequences not just for the trust and the patients, but also for the project company [Three Valleys] and the funders [Bank of Scotland].”
Ms Justice O’Farrell reserved judgement in the case to a later date, saying she would deliver it “as soon as I can.”
Healthcare Emergency campaign group director John Lister welcomed the trust’s actions, saying: “It is rare that trusts even have the guts to try and break [PFI contracts] in the first place.”
He said trusts “quite often wind up footing the bill” when “the risk is supposed to be with the PFI consortium.”
Three Valleys Healthcare’s 2016 accounts, filed in November, recorded a £1.1m loss for the year, largely attributed to legal and other fees arising from the dispute with the trust, which it paid £2.1m in a settlement over service levels in October 2016.
Its parent, Three Valleys Healthcare Holdings, called in administrators KPMG in September, which the company said may cast “significant doubt” on its ability to continue as a going concern, admitting that the company relies on its monthly PFI cheque to stay afloat.
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