University Hospitals of Leicester Trust plans to borrow up to £36m to fund the expansion of Leicester Royal Infirmary’s accident and emergency department.

An outline business case published by the trust suggests the whole project’s cost is about £48m. While three-quarters of the cost would be covered by a loan, the remaining £12m would come from the trust’s own capital programme fund and would pay for “enabling works” over the next two financial years.

In a paper to the trust’s board, chief executive John Adler laid out a number of options to increase emergency capacity, ranging in cost from £48m to £53m.

Trust director of finance Andrew Seddon said: “Our current emergency department facility is no longer fit for purpose and the restrictive space provides daily challenges.

“We are one of the largest hospital trusts in the country and have an annual capital budget of just under £40m which covers spend on our estate, medical equipment and IT.

“This scheme alone would take up almost one and a half years of our total capital budget - and clearly it is not realistic for the trust to fund this scheme without use of borrowing.

“As we progress the business case we will clarify the funding - but for the moment we are assuming that the majority of the development costs will be funded via medium term debt. This is no different to the approach that would be taken by most businesses, public or private sector.”