The boss of Bradford's privatised education service has reaffirmed its commitment to the district after a year-long behind-the-scenes wrangle over cash.

Mark Pattison, managing director of Education Bradford, told councillors its parent company Serco had no intention of pulling out of the ten-year deal.

He spoke after concerns were expressed that Bradford's £360 million "outsourcing" experiment could go the same way as that in the London borough of Southwark, where private operator W S Atkins withdrew from a similar contract.

But talks between Bradford Council and its private partner have saved the deal. Members of the education overview and scrutiny committee were told that "lessons have been learned" and that the original contract had been flawed.

Mr Pattison said: "On behalf of Serco we are fully committed to this contract."

The new deal means Serco gets an extra £1.49 million this year.

In addition councillors will be asked to agree to scale back some of Education Bradford's performance targets, now deemed unrealistic.

Mark Carriline, assistant chief executive at the Council, said the original deal struck in 2001 was built on two assumptions: that Education Bradford would hit 80 per cent of its performance targets, netting incentive payments worth up to £800,000 in year one and £1.8m the following year; and that it would make handsome profits on its "traded services" which can be bought in by schools.

"Instead of 80 per cent, the actual achievement was one per cent," Mr Carriline said.

Members of the scrutiny committee had exercised their power to "call in" an earlier decision of the Council's ruling executive, amid concern over the way the Education Bradford deal had been renegotiated. They then voted 7-2 in favour of rubber-stamping the deal.

Councillor Michael Johnson (Lab, Tong) demanded to know what Price Waterhouse Cooper, the consultants who advised on the deal, had charged the authority. "It cost the citizens of Bradford quite a sum of money to get this contract drawn up in the first place, and it is flawed," he said.