The abrupt halt in the construction of the £33m hospital in Berwick has sent shockwaves through the community after offsite construction specialist Merit filed for administration, leaving both the hospital and the £30m NHS Medicines Manufacturing Centre in Seaton Delaval in limbo.
This setback not only disrupts the healthcare infrastructure development plans but also raises concerns about the future of these critical projects. Despite the challenges, Northumbria Healthcare remains steadfast in its commitment to see both schemes through to completion, assuring stakeholders of their comprehensive contingency plans to ensure work progresses smoothly. The unfortunate situation serves as a stark reminder of the unpredictability of the construction industry and the importance of contingency planning in the face of unexpected challenges.
It said work on the hospital had so far “progressed well” and that the organisation “remained focused” on delivering both projects.
On 27 August, HMRC lodged a winding-up petition against Merit Group Services in the High Court.
The decision to seek administration for Merit Holdings was taken after this petition was heard at the London Companies Court on 15 October.
A spokesperson for Merit previously told Construction News: “The recent filing of a winding-up petition against Merit Group Services resulted in certain customer projects experiencing delays, which in turn has placed significant additional pressure on the group’s cashflow.
“We have therefore taken the decision to file a notice of intention to appoint administrators in order to protect the position of the business while we explore options.”
In its most recent accounts, Merit Holdings insisted its future was “tremendously exciting” despite a huge drop in pre-tax profit, which plunged by 72 per cent, from £8.4m to £2.3m, in the 12 months to 30 June 2024.
Turnover fell 8 per cent, from £94.3m to £86.6m, over the same period.
