Watford's Health Campus scheme is nearly £4 million over budget already after just two years.

Politicians passed plans for the project - which includes 681 new homes, space for regeneration of Watford General Hospital, shops and land set aside for the expansion of Laurance Haines Primary School - in September 2014.

But Watford Borough Council admitted in a letter sent to Secretary of State for Communities and Local Government Greg Clark that it had already overspent on the scheme.

According to the letter, written by head of partnerships and performance Kathryn Robson, the cost of the unfinished approach road through Oxhey Park has already increased by £3.8million.

The road, which is due to open this year, was estimated to cost £15,510,313 in June 2013, but this increased to £18,066,665 in January – apparently due to construction inflation rising “significantly” in the two years.

The road is the first major phase of the scheme to be delivered.

Clearing unknown site contamination has cost an extra £1,035,906.

A one million pound 'Block Central Zone' intended to be a part of the scheme containing shops and other commercial premises which was to be located inside the present hospital grounds on NHS land has also been scrapped.

The council cited "uncertainty with the hospital" as the reason for abandoning this part of the scheme.

Ms Robson said in the letter that the ongoing allotment issue is delaying the project, with the next phase of the scheme also over budget.

She said it is "vital" to ensure the scheme progresses and Farm Terrace allotment land is still "essential" for the campus' viability.

The council had granted access to build on the Farm Terrace allotment land, but that was overturned by the High Court.

The council went back to the former Secretary of State Eric Pickles for permission to build on the allotments in January last year after the High Court blocked his decision to grant approval for a second time.

Members of West Watford and Oxhey Garden Society say they will lose years of labour if their Terrace Farm plots are concreted over as part of the £300 million project.

Sara Jane Trebar, who has campaigned to save the allotments, said: “We have identified a number of specific issues with the figures given by Watford Borough Council and we will be asking the government to look into these closely.

“We believe that this will show the government just how unstable plans are and that the case for concreting over the allotments is now weaker not stronger.”

The ‘Business Zone South’ – a phase approved in January to build 681 homes, create new parks, deliver a public square and safeguard land for school expansion – is also overbudget by £1.88million, before any building work has started.

Elected Mayor of Watford Dorothy Thornhill said: "It’s very sad that the allotment holders are still trying to damage this scheme, which will support our hospital's future, and create new jobs and homes.

"The original application to the government was put in over two years ago and since then, as everyone knows, costs in the construction industry have gone up across the country."

In the next 20 years the Health Campus scheme plans to build 750 homes on 65 acres of land surrounding Watford General and is expected to create 1,000 new jobs.