CONTROVERSIAL private funding schemes used to pay for building schools, including three in York, have been criticised in a report published today.

The study by the Audit Commission found PFI initiatives did not bring any noticeable benefits or deliver better value for money than those funded directly by the state.

York primary schools Hob Moor, St Barnabas' and St Oswald's are set to be re-built under the scheme.

Kevin Curran, the northern regional secretary of the GMB, said: "The claim that PFI has delivered more funding for school buildings is nothing more than an accounting sleight of hand.

"The taxpayer still pays, but instead of just paying for the new school building, we pay for the building plus the profits of the private companies involved.

"PFI is a substitute for, rather than an addition to, conventional investment from Government.

"There is more and more evidence stacking up against PFI. It would be madness for the Government to throw yet more taxpayers' money at PFI when evidence proves PFI is expensive, does not deliver improvements to our public services and is not publicly accountable".

But Coun Janet Looker, the executive member for education at the City of York Council, said the PFI scheme was the only way York was going to get three new schools and the council had chosen a low-risk approach.

She said: "What I want are the new schools and at the moment the only way we can get them is through the PFI.

"We have quite a small scheme. With the very big schemes, where they are building a lot of schools or big secondary schools, there is quite a risk over the long term.

"We have gone for a small scheme and we have done the sums carefully. We think it is reasonably safe for the schools and the LEA."

The PFI scheme works like a mortgage, with the council borrowing money from private firms to pay for the building of the schools. The money is then paid back over a number of years.

The scheme in York has caused controversy with three Fulford Parish councillors resigning over the issue.

Updated: 09:10 Thursday, January 16, 2003