Ilkley'S replacement for the Coronation Hospital is continuing to be held up by negotiations between health trust leaders and Ilkley Grammar School.

Hospital owner Airedale Primary Care Trust (PCT) says it is still locked in discussions with Ilkley Grammar School about legal issues over the development of the Springs Lane hospital site, despite its recent pledge to sell the land in a private finance development scheme by Christmas.

It is believed that the Trust ran into problems with a covenant on the land restricting what can be built there in future, and requiring the agreement of the neighbouring school.

The Trust, which drew up plans for a three-storey Health Care Centre as a replacement hospital building, plans to sell the land to development company Benchmark, and lease the new building back in future.

Ilkley parish councillors recently made pleas to Ilkley Grammar School governors to resolve the situation as soon as possible, for the good of the whole community. Campaigners want all issues around building on the land resolved before the site is sold into private hands.

The PCT's corporate development director, David Riley, said: "We are still holding meetings and negotiating with the school to come up with an outcome which is satisfactory for all concerned. We are working hard to try and resolve these issues by Christmas but we are aware that resolving legal issues can take some time."

But as well as the desire to move the rebuild project forward, Airedale PCT may have other reasons for wanting to go ahead with selling the hospital site.

Members of Airedale Primary Care Trust (PCT) Board heard at its last meeting that the Trust is expected to overspend by more than £2 million this financial year.

The Trust had already overspent by £829,000 in the first five months of this financial year, acting finance director Ruksana Lindley said in a report to the Trust Board, and she forecast a £2,068,000 overspend by the end of March 2005.

Among Trust chiefs' plans for cutting the spending gap was the sale of Ilkley's Coronation Hospital at a profit during the current financial year, to reduce the Trust's outstanding financial shortfall on revenue expenditure. The Trust took on ownership

of the Ilkley hospital two years ago.

The Trust plans to sell the Springs Lane site to private company Benchmark, which will develop it and build the replacement Health Care Centre which is expected to house Ilkley's current hospital services. Trust officers recently said they want the site sold by Christmas.

Other money-saving ideas in local health services include urging all budget holders to inform finance bosses of any service reconfigurations that might result in savings without jeopardising patient care, and reviewing staffing levels and 'skill mix' options. No update on progress with the Coronation Hospital redevelopment was given at the meeting, because there had been no significant developments since the Trust's last meeting.