Civil servants working for Jeremy Hunt successfully lobbied the Cabinet Office to stop failing Carillion hospital projects from being overseen by an independent watchdog, an official report has disclosed.

A National Audit Office report said the Department of Health intervened in 2015, which meant the Cabinet Office took responsibility for oversight of Carillion’s health construction projects including the Midland Metropolitan hospital. Hunt was health secretary at the time.

Until that point, the construction schemes had been overseen by the Major Projects Authority (MPA), which specialised in monitoring the stability of contentious and expensive projects.

Taxpayers are on course to pay out more than £150m following the collapse of Carillion in January, according to recent reports.

About £100m of this will go towards completing the Midland Metropolitan hospital in Sandwell and the Royal Liverpool University hospital, whose oversight was taken away from the MPA.

John McDonnell, the shadow chancellor, demanded that the government explain who was responsible for changing the oversight of the projects.

“It could be construed as reckless to remove these projects from the MPA, which was specifically set up to provide assurance that major projects of this nature were being properly managed. We need clarity on who was responsible for making and concurring in this decision,” he told the Guardian.

According to the report, “the then Department of Health lobbied successfully to remove hospital construction projects from the portfolio [of the Major Projects Authority].

“These projects included the Midland Metropolitan and Royal Liverpool University hospitals, two of the four public sector contracts on which Carillion faced large losses before its collapse.”

The report said the Cabinet Office then monitored the Carillion health projects. “Once it was aware of the company’s financial difficulties in July 2017, the Cabinet Office developed detailed contingency plans,” the report said.

The MPA was created in 2011 to improve the delivery of major projects. It was merged with Infrastructure UK in 2016 and renamed as the Infrastructure and Projects Authority.

The Cabinet Office and the Department of Health and Social Care have been asked to explain who authorised such lobbying, who they lobbied, and which ministers were involved in the decisions to remove Carillion hospital projects from the MPA.

A government spokesperson, speaking for both the Cabinet Office and the Department of Health, said: “As the report makes clear, all hospital projects were removed from the portfolio of the Major Projects Authority – not just those associated with Carillion – as the responsibility was moved from the department to the relevant trusts.”



