A PFI consortium including Bovis Lend Lease will fund 300-bed scheme with new method of finance involving government gilts.

A £220m cancer treatment centre in Leeds has been given the financial go-ahead following a PFI funding agreement.

Catalyst Healthcare, a PFI consortium comprising Bovis Lend Lease and the Bank of Scotland, has attained financial close for the new oncology unit that is being built for Leeds Teaching Hospitals NHS Trust at St James’s University Hospital in Leeds.

The new 12-storey building designed by architect Anshen Dyer will have 300 inpatient beds for specialist cancer treatment and a range of diagnostic, day care and outpatient services.

Catalyst Healthcare will finance, design and construct the centre as well as provide the medical equipment. The PFI agreement also includes the facilities management and maintenance of the building for 30 years.

Lend Lease said the scheme was the first British PFI project to use Credit Guarantee Finance, which separates funding and risk taking by retaining the banks as risk takers. Government gilts are used to fund the project, which saves the private sector the cost of securing funds, which is separate from the risk costs.

Construction on the centre is due to start in November and it is due to open in early 2008.