Dartford and Gravesham NHS Trust had inadequate systems for controlling costs on private finance initiative projects, according to a damning report by the Public Accounts Committee published last week.

The PAC report on the Dartford hospital project criticised the trust for failing to spot errors in the public sector comparator and slammed West Kent Health Authority for failing to accurately estimate the cost of the long-term contract. The PAC also expressed “alarm” that the cost of advisers ran to £2.4m – a 700% increase on initial estimates.

KPMG, which advised on financing, said: “This was the first PFI contract for a new hospital. Thus there was a steep learning curve for all parties involved.”

The NHS Executive now expects to save only £5m by using the PFI rather than a traditional procurement route. It expected to save £17m. An additional £4m a year will also have to be found by the trust for it to meet its contract commitments over the deal’s 25-year term.

A spokesman for the trust said: “The trust is already aware of the issues referred to by the PAC, which are covered in a National Audit Office report published in May 1999.”