Balfour’s £160m Highlands hospital job delayed for two years

The redevelopment of two hospitals in the Scottish Highlands has been put on hold after the Scottish government froze hospital construction spending for two years.

NHS Highland has confirmed that the £160m redevelopment of Lochaber’s and Caithness’s health facilities, led by Balfour Beatty, will not go ahead for the foreseeable future.

Scottish NHS boards have been advised to immediately halt project development spend, with the Scottish government not expecting to launch hospital construction projects for at least two years.

A spokesperson for NHS Highland said: “Our staff and communities have invested time and effort into these projects and we know this news will be difficult to hear.

“We are contacting key stakeholders as a priority so that we can work through the implications with them.”

Balfour Beatty was appointed as principal supply-chain partner and managing contractor for the two projects in April via the NHS Frameworks Scotland 3 process.

The Lochaber project was set to replace Belford Hospital in Fort William, Scotland’s busiest rural general hospital.

Construction work was expected to begin in 2025 and end in 2028. Balfour Beatty started ground investigations at the site in October.

Caithness General Hospital in Wick was set to be fully upgraded and refurbished, with an expanded emergency department and increased number of single en-suite bedrooms. The redesign would have also included building services upgrades and accessibility improvements.

A spokesperson for the Scottish Government said there had been a real-terms capital funding cut of nearly 10 per cent between 2023/24 and 2027/28 due to the UK Government’s failure to “inflation-proof” its capital budget.

Meanwhile, NHS Lanarkshire has said it remains “fully committed” to the £700m Monklands Replacement Project. Laing O’Rourke was appointed to help build Scotland’s first “fully digital and net-zero carbon hospital”  in August under a preconstruction services agreement.

A spokesperson said: “We are continuing to work on developing a Full Business Case (FBC). Part of this process is having ongoing discussions with the Scottish Government regarding the budget for the project, which will be finalised as part of the FBC process. We are aiming to have the FBC complete during 2025.”

Balfour Beatty declined to comment.

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