Work Halted on £33m Berwick Hospital as Merit Enters Administration

Work on the new £33 million hospital in Berwick has been abruptly halted after its appointed offsite construction specialist, Merit, filed for administration. The Northumberland-based firm, which was contracted in 2023 to build the state-of-the-art facility, ceased operations last Friday. This development also impacts a separate £30 million NHS Medicines Manufacturing Centre in Seaton Delaval, also being designed and fitted out by Merit.

Key Takeaways

Construction on the £33m Berwick Community Hospital has stopped.
Merit Holdings Ltd and Merit Health Ltd have filed for administration.
A £30m NHS Medicines Manufacturing Centre in Seaton Delaval is also affected.
Northumbria Healthcare remains committed to completing both projects.

Project Disruption

The halt in construction comes after Merit Holdings Ltd, the company’s primary trading entity, and its subsidiary Merit Health Ltd, both applied to appoint administrators. This move followed a winding-up petition lodged by HMRC against Merit Group Services in August, which was heard in the High Court in October. Merit had previously cited delays on customer projects due to this petition, leading to significant cash flow pressures and the decision to seek administration to protect the business while exploring options.

Northumbria Healthcare’s Response

Northumbria Healthcare Facilities Management confirmed the work stoppage and issued a statement expressing regret over the situation. They assured stakeholders that the trust remains committed to delivering both the Berwick Community Hospital and the Seaton Delaval Medicines Manufacturing Centre. The organisation stated it has adhered to contractual agreements and is working closely with Merit and its advisors. Robust plans are reportedly in place to ensure construction work continues on both sites, despite the far-reaching effects of Merit’s administration.

Merit’s Financial Performance

In its most recent full-year audited accounts for the period ending June 30, 2024, Merit Holdings reported a significant drop in pre-tax profit, which fell by 72 per cent from £8.4 million to £2.3 million. Turnover also decreased by 8 per cent, from £94.3 million to £86.6 million. Despite these figures, the company’s accounts had previously described its future as “tremendously exciting.”