Plans to build the second-largest specialist cancer hub of its kind in the world may have hit a stumbling block after the Institute of Cancer Research (ICR) pulled out of a deal to create a multi-million pound company with Sutton Council.
Councillors had agreed to set up the council-owned company with the ICR to secure land at a strategy and resources (SR) committee meeting on Monday, February 20.
The company said it would take a loan out to buy the land at the Sutton Hospital site to develop the cancer hub for what is believed to be tens of millions of pounds.
But, the council admitted the ICR pulled out of the arrangement in a report submitted to the SR committee on Friday, March 17.
A council spokesman insisted the council bought the site because it was "quicker", and that this did not rule out any land partnership in the future.
He stated: "The London Cancer Hub is a step closer to being realised.
"We are delighted to buy the land for the partnership to realise our shared ambitious vision.
"It is completely wrong to say the partnership is not as strong as ever.
"The council bought the site directly because it was quicker. This does not preclude any future land partnership.
"With our partner the Institute of Cancer Research, we are working hard to secure investors to make our vision a reality, and deliver a truly world-class hub of which all of us can rightly be proud."
The report placed before the SR committee last week read: “Through further detailed due diligence, negotiations and discussions with advisors it has become apparent that the mechanism of an LLP is not achievable."
The document then outlined the risks of taking on the project alone.
“Based on this and an assumption that land values increase by 1.5 per cent per annum (as per the indicative model reported to the SR Committee) then an estimated deficit of £0.33m would arise upon an exit.
“This would fall to the council alone. Under the LLP model based on five years of borrowing the council’s share of the deficit was estimated at £0.63m (exit after three years).”
In a section highlighted as ‘risks’ the council acknowledged the financial uncertainty of taking on the project on its own.
It said: “The recommended approach in this revised report means that the council will be taking all the risks as sole landowner going forward, however, as a strategic asset this will also assist in the achievement of its policy objectives.
“Whilst recognising there are potentially future financial risks it is expected that these can be managed effectively in order to minimise direct impact on the council.”
A spokesman for the ICR said: “We are fully committed to our partnership with the London Borough of Sutton to develop The London Cancer Hub and are pleased to see the programme progress.
"We firmly believe that by working together on The London Cancer Hub, the ICR and the London Borough of Sutton can deliver a project of global significance with benefits for cancer patients, the local community, and the UK economy.”