It was closed on 2 February 1996 due to the high cost of running the old building as well as the discovery of asbestos in the walls.
All this is of course true, but 99% of military buildings were affected by asbestos! It was 'Options for Change' a late 1980's study aimed at cutting defence spending following the end of the Cold War that closed the hospital and all others as well, with a plan to use military wings in NHS hospitals instead. It was the same study which disbanded the Royal Observer Corps leading to the closure of ROC posts as well as around a 18% overall cutback on military manpower.