Chancellor George Osbourne confirmed in today’s Comprehensive Spening Review that the £219 million of investment planned for St Helier Hospital is safe.

As he set out the review, Mr Osbourne named the new hospital, based in Carshalton, as first in a list of commitments the Government has guaranteed to keep.

Tom Brake, MP for Carshalton and Wallington, and Paul Burstow, MP for Sutton and Cheam, both hailed the news as a “real victory for local residents”.

Mr Brake said: “Not only has the Chancellor confirmed that the pupil premium which will benefit many local schools is to proceed.

“Not only has he confirmed that many billions will be available to renovate schools which again should benefit local schools, but he has also made it absolutely clear St Helier Hospital will get the money it needs to be re-built.”

Mr Burstow said: “We have fought long and hard with the support of local residents, patients, NHS staff and local Councillors to get the money for St Helier.

“The Chancellor has made it crystal clear the money is there. The Hospital Trust must now go full steam ahead to re-build the hospital.”

Samantha Jones, chief executive of Epsom and St Helier University Hospitals NHS Trust, said the priority now is to turn the “single biggest investment in healthcare in the area for a generation” into a reality.

She said: “While we recognise the difficult financial climate we face as a nation, the St Helier Hospital redevelopment is vitally important and just had to go ahead.

“Whilst our doctors, nurses and other staff do a fantastic job in providing care to the people of Sutton, Merton and surrounding areas, it is in an old and run down hospital. “This investment will completely transform the St Helier Hospital site and ensure that our patients are able to receive first-class care in a first-class environment.

“The sooner we get builders and bulldozers on the site, the better.”

The £219m plan includes demolishing the hospital's five-storey Ferguson House and replacing it with a brand new, state-of-the-art hospital building which will house the majority of St Helier's wards and clinics.

The 20,000 m² seven-storey building will include 348 beds, with more than 50 per cent being in single rooms.

In addition, a new day 1,000 m² nursery will be built where the children of staff are looked after.

A decked car park will also be built making it easier for patients, visitors and staff to park on the site and millions of pounds will also be spent on upgrading the remainder of the hospital site.

Building work on the new hospital is due to start in 2012.