THE project to completely rebuild three York schools using millions of pounds of private cash is expected to go over budget by £130,000, new figures show.

City of York Council's education advisory panel will on Thursday be asked to approve making up the shortfall from revenue reserves.

More than £8 million of the private finance initiative (PFI) money was secured in April to build new primary schools at Hob Moor, Acomb, and St Barnabas' Primary, Leeman Road, and St Oswald's Primary in Fulford.

Private finance initiative projects are public sector works funded by both the taxpayer and private investors.

Because the schools rebuilding was City of York Council's first PFI project, professional advisers were hired to steer it through.

"It is clear we will need to rely heavily upon them for assistance in putting the project together until our own expertise is developed," says a report to the council's education advisory panel from its PFI project manager Damon Copperthwaite.

But the estimated cost of those advisers has leapt from a total of £200,000 to £340,000.

And the estimated project management costs have risen by £50,000 to £150,000.

The council had originally budgeted for a total project cost of £500,000, now revised to £630,000.

The council has partly blamed the increased cost on the project overrunning by a year.

This, it said, was because there was a delay in getting the scheme approved.

The proposed special needs school at Hob Moor, which was not included in the original PFI plan, now makes up a "significant element" of the scheme, the report states.

Hob Moor Primary School was made of corrugated aluminium in the 1950s and was only meant to stay up for 15 years. The other two school buildings are cramped and outdated.

Several previous attempts had been made to secure private finance initiative money for the rebuilding work.

Updated: 11:41 Monday, September 16, 2002