A £3.4 million handout was due to be signed for York today (Thurs) when local government minister Chris Leslie visited York.

Vital city services will receive the extra cash if City of York Council manages to achieve set targets.

It is part of the Local Public Services Agreement to be launched next year.

The council has set out ambitious aims in 12 areas, including education, social care, transport and dealing with crime.

The cash acts as an incentive to meet the targets, which include campaigns like the current effort aimed at getting more children to cycle to school.

The minister was signing the agreement with council leader David Merrett and chief executive David Atkinson at a meeting at Archbishop Holgate's school this afternoon.

He was then meeting the council's environment director Roy Templeman at Burnholme Community College, in Bad Bargain Lane, to talk about the authority's cycling to school initiative.

Julia Veall, the council's chief officer, said: "This is exciting news for the city because it will provide a direct incentive for raising the stakes in service improvement. The more targets we meet, the more money we will get to plough back into services."

Coun Merrett said: "Pound for pound, City of York Council is already one of the best performing all-purpose councils in the country in key areas such as education and social services, but we are not complacent and we see this as a way of setting ourselves new challenges while ensuring those services continue to have a customer focus at their heart."

Updated: 09:07 Thursday, September 19, 2002