The Department of Health has committed an extra £60m to a Brighton hospital after construction costs increased on the Laing O’Rourke project.
The Royal Sussex County Hospital had an outline cost of £420m when the scheme was first proposed in 2009.
That figure was approved last year but costs have since grown, with the project now expected to cost £486m.
On a visit to the site yesterday, health secretary Jeremy Hunt confirmed that the government would foot the bill for the increased costs.
He said: “I can reiterate the government’s commitment to this scheme and say that my department has earmarked the funding for the inflationary impact on the scheme meaning around £480m is now set aside for this fantastic project.”
A spokesman for Brighton and Sussex University Hospitals NHS Trust said: “The figure of £420m, set in 2009, went into the outline business case that was approved in May 2014.
“The change in the figure reflects the upturn in the economy, changes in construction costs, VAT, equipping costs, historical inflation since the original budget was set, and predicted inflation till programme end in 2023.”
The current buildings on the Royal Sussex County site are among the oldest in the NHS and date back to the 19th century.
Redevelopment work had been due to start this year and complete by 2024.
The hospital’s capacity will expand by 100 beds and the neurosciences and cancer centres will both be improved.
When the outline business case was approved last May, HM Treasury said the works at the site would be fully financed from public funds and as part of the Department of Health’s capital investment budget.