The private finance initiative (PFI) company responsible for the acute care building at London’s Whittington Hospital has filed for administration after being asked to fund remediation work.

The hospital trust has now taken on management of the building and responsibility for the remediation, but it is still unknown how the work will be funded.

Whittington Facilities was set up in 2003 to deliver and maintain a new acute hospital building at the health facility in Archway, north London. The project was completed in 2008 and the PFI contract runs until 2034.

Contractor Jarvis, originally part of the PFI company, ran into financial difficulties during the project, and exited the construction sector as well as the PFI contract.

The Whittington Health NHS Trust has been pursuing Whittington Facilities, whose ultimate parent is finance firm Trinity Investment Capital, to pay for defect remediation since 2018.

In January of that year, a fire broke out in the basement of the building. The premises were evacuated but no one was injured.

Hospital trust board minutes from October 2019 reveal that it had been working on a “major fire safety remediation project” but in the meantime had increased its number of security guards, fire wardens and carried out extra fire drills in a bid to keep patients safe. These measures remain in place as work to fix the defects has not yet been carried out.

In its latest accounts for the year to 31 December 2018, Whittington Facilities said company directors were working to assess whether defects and “performance issues” claimed by the trust really existed. The company warned it might go under if they were found.

“The directors believe there is a reasonable prospect that cash outlays will be required, which casts doubt on its future ability to trade as a going concern,” it said. It added that the company had breached its covenants with Lloyds Bank after the end of 2018 but the bank had not yet called in its debts. The report said: “In the event of a pending or likely insolvency, the company would appoint an administrator to stay any legal action against it and to attempt to negotiate settlements with its clients and creditors to avoid an insolvency event.”

The firm filed for administration last month. It was one of 16 in the construction sector to do so in August.

A spokeswoman for the Whittington Health NHS Trust said: “The trust has worked with the administrators and has now taken over the management of the services that were being delivered by the PFI company.

“We have developed contingency plans to ensure there is no impact on the ongoing management of the PFI building and the continuity of all services. A full survey of the building will be conducted to determine the extent of any construction defects and it is our intention to fully address these deficiencies.”

She added: “The current position with regard to coronavirus makes it difficult to be sure but we certainly mean to address these issues as soon as possible.”

Negotiations about the costs to the taxpayer and how the remediation will be paid for are ongoing with administrator Deloitte.