Frugal council bosses have managed to save a massive £6 million in the last financial year.

The huge savings are good news for the beleaguered education service - because an extra £4 million can now be set aside to meet the costs of the school re-organisation.

It will go towards transitional costs - not buildings - which would include teachers' severance pay and relocation costs.

But the good news, which will be reported to the executive committee next week, is followed by a separate financial forecasting report which shows there will be tough times ahead.

Both reports have been prepared by city finance officer Steve Morris.

They show the council will need to keep a tight hand on the purse strings to plough in the additional £11 million it has pledged for education over the next three years.

All three main political parties are backing the strategy to drive up standards in the district's schools.

But Mr Morris points out that the Council could face a £4 million cut in its Government spending settlement next year because of falling rolls in the district's schools.

The report on the savings achieved in the past year shows a one per cent spending reduction set for the directorates by Chief Executive Ian Stewart was largely achieved.

Executive member for Corporate Affairs, Councillor Richard Wightman said: "Every penny of this money will be needed to fulfil our commitment to direct more funding to schools and to ensure the successful transition from a three tier to a two tier education system.

Leader of the Liberal Democrat Group, Councillor Jeanette Sunderland said: "Council officers have done a good job of ensuring the Council is in the best possible financial position, bearing in mind cutbacks and ten years of Labour rule."

Deputy leader of the Labour group Councillor Barry Thorne said: "It is due to our sound financial management and we will continue to help and advise the other groups.