Council chiefs are proposing to pay Bradford's privatised education service an extra £1.7 million this year.

The cash comes on top of the original deal struck with Serco, worth £360 million to the company over ten years.

The Council, which contracted-out education in 2001, wants to increase the annual fee paid to the company by £1.49 million. Part of this is £661,000 for additional work Education Bradford is carrying out. The other £833,000 is cash that would have been available as incentive pay tied to performance targets, but would be paid automatically from now on.

A further £1 million a year would be available as an incentive. And the Council is increasing by £206,000 the amount it pays for welfare transport.

The increases were due to be debated at City Hall today at a meeting of the Council's ruling executive. When the contract - the biggest of its type in Europe - was negotiated, it was agreed that the Council should pay Serco an annual core fee to cover the costs of running the service, based at Future House in Bolling Road.

The contract also allowed for a performance bonus of between £1 and £2 million per year, to be paid out if targets were met and educational standards rose enough. But in year one, the company only earned a fraction of the bonuses.