EDUCATION chiefs in York are expecting to run into the red as they struggle to meet the rising cost of teaching children with special needs and transporting pupils to schools.

Finance bosses have already put all new staff vacancies on "review" and double-checked extra costs like equipment, materials, travel and training, to try to cut the overspend.

They blame the unexpectedly high cost of placing a small number of children with special needs in expensive "out of authority" placements.

Accountants have found savings of £314,000 to make up some of the shortfall, but £596,000 remains outstanding. This is, however, less than one per cent of the £81,157,000 12-month budget.

School governors, teachers and councillors were meeting today to look at how managers are trying to balance their sums and keep costs in check.

A report by Richard Hartle, head of education and leisure finance at City of York Council, said a package of cost-cutting procedures had already been put in place.

He said: "This action is having an effect and will be continued in an attempt to reduce the overspend further, but it may now be unlikely for any further significant contribution (to be made)."

He said that next year's budget was being revised to provide for "significant recurring overspends" because the cost-cutting measures could not be repeated.

Unexpected extra education costs this year include:

More than £700,000 spent on the special education needs service following extra pressure on "out of authority" placement budgets.

Late invoicing of services and other factors have increased home-to-school transport costs by £55,000. But managers have reduced costs by streamlining some routes.

An increase in the number of hours put in by learning support assistants who work with children with severe learning difficulties. This could push wage bills up by £50,000 or more.

However, savings have been made with an underspend in nursery education of £120,000, vacancies in crossing patrols, cutting wages and a restructure of education management.

Speaking about the increased cost of the special educational needs service, Mr Hartle said there had been "significant and severe" pressure on placement budgets.

He said: "This is due almost entirely to a small number of additional very high cost placements that have had to be made over the past year."

Updated: 14:11 Monday, February 16, 2004