1.8 In September 2017, following Carillion's second profit warning, the Cabinet Office requested public bodies with Carillion contracts to provide contingency plans. The Liverpool PFI company (The Hospital Company (Liverpool) Ltd) and the Liverpool Trust both submitted contingency plans to the Cabinet Office. These focused on Carillion's facilities management services at the existing hospital, as these were operational public services, but the Trust's plan also included the immediate risks to the construction of the new hospital. Midland Metropolitan did not use Carillion's facilities management services and so there was no requirement for the Cabinet Office to ask the PFI company or the Sandwell Trust for service contingency plans.
1.9 Under the PFI model, the PFI companies bear the financial risk of completing their projects. The Department of Health & Social Care, NHS Improvement, the Cabinet Office, HM Treasury (the Departments) and the Trusts thus believed that the PFI schemes would continue if Carillion failed, if necessary with replacement construction contractors.
1.10 The PFI companies' own contingency planning assumed that construction would be disrupted if Carillion failed while they found new contractors. They focused on ensuring they were able to step in and secure the site and had the information they needed to replace Carillion as a prime contractor.