Northumberland Health Trust Confirms Plans for £35M Hospital Amid Contractor Issues

Health authorities in Northumberland are moving forward with the construction of a new £35 million community hospital in Berwick despite challenges posed by its main contractor, Merit. The company recently filed a notice of intention to appoint administrators, following a winding-up notice from HM Revenue and Customs (HMRC). This situation has raised concerns about the project’s continuity, but health trust officials are optimistic about the path ahead.

Merit, once named North East Company of the Year, has been managing the construction of the Berwick Community Hospital since winning the contract from the Northumbria Healthcare NHS Foundation Trust in 2021. The firm is also responsible for developing the Medicines Manufacturing Centre at Seaton Delaval. Despite its current financial difficulties, Merit has stated it is exploring options with business advisors, maintaining confidence that a resolution will be found.

In a statement, the Northumbria Healthcare NHS Foundation Trust confirmed it is in discussions with Merit. A spokesperson expressed understanding of the challenging situation, emphasizing the trust’s commitment to adhere to contractual agreements while ensuring that construction progresses. “We have robust plans in place to ensure construction work continues to progress on both the Berwick Community Hospital and the Medicines Manufacturing Centre,” the spokesperson stated. “We remain focused on delivering both projects as planned and are in ongoing dialogue with all relevant parties to ensure continuity and minimize any potential disruption.”

While Merit has been granted an extension on its administration notice, reports indicate that subcontractors are facing difficulties. Approximately 50 specialists, hired through recruitment firm AE Partners, were instructed via urgent emails not to return to the construction site due to payment issues. The agency claimed that an outstanding balance owed by Merit prevented them from processing timesheets.

In emails reviewed by BusinessLive, AE Partners informed workers of the situation, stating: “Unfortunately, due to the outstanding balance and the fact that the payment we were promised has not yet been received, we were unable to accept any timesheets from Merit this week.” The firm assured that they are working diligently with Merit to resolve the payment issues and ensure that all workers are compensated.

One subcontractor, who requested to remain anonymous, expressed frustration about the situation. “I received an email from AE Partners on a Sunday telling me not to go back to work on Monday because Merit hasn’t paid us,” the worker said. “I’m owed hundreds of pounds and have a family to feed. We’re not happy about this.”

AE Partners clarified that all necessary paperwork must be submitted to Merit for approval before payments can be processed. The company acknowledged that while they had managed to cover payment requests previously, the recent lack of promised funds from Merit has forced them to cease supplying contractors. They stated, “We informed Merit five to six weeks ago that we could no longer supply them and would have to stand down contractors.”

Despite these challenges, Merit has reportedly maintained a presence at the construction site in Cramlington. The ongoing dialogue between the health trust and the contractor remains crucial as both parties aim to navigate this difficult period.

The situation surrounding the Berwick Community Hospital construction highlights the complexities and pressures facing contractors in the current economic climate. It also underscores the importance of effective communication between companies and their subcontractors to ensure that projects of such significance can progress without disruption.

As discussions continue, stakeholders are hopeful that the necessary solutions will be found, allowing the ambitious healthcare project to move forward as planned.