A £326 million PFI scheme to rebuild 12 Birmingham schools represents poor value for money to city taxpayers, education union leaders have claimed.

Birmingham City Council has finalised a deal that will see construction firm Balfour Beatty complete the work as a Private Finance Initiative project.

Under the controversial arrangement, Balfour will build and manage the schools while the authority pays off the cost over a 30-year period, similar to a mortgage.

But public services union Unison claimed local taxpayers would be hit by the interest charged.

"The taxpayers of Birmingham will be paying for that for the next 30 years," said Caroline Johnson, assistant branch secretary of Unison's Birmingham branch.

"It will be more than if we borrowed the money ourselves and is not value for money.

"I think it is a mistake to rely on the private sector. If the schools really needed rebuilding or refurbishing we could have borrowed the money and given pupils a secure future rather than an insecure one which they will have in the private sector."

Current Government philosophy relies heavily on PFI arrangements to upgrade facilities in areas of the public sector such as health and education.

However, three years ago the Audit Commission published a damning report on its use to replace crumbling schools. It claimed those built under the scheme were "significantly worse" in terms of space, heating, lighting and acoustics than new traditionally funded primaries and secondaries.

Ministers say improvements had been made since the early days of the drive.

H owever Ms Johnson warned union members still remained unconvinced it was the best way forward.

"Nationally we had a big discussion about PFI last year at our conference. We had speakers from schools that have been built using PFI money.

"They said they look beautiful at first but when you move into them they turn out not to be quite what you expected.

"We had teachers saying they couldn't fit pupils in because the classrooms were half the size. Some of the schools were saying things had gone wrong really quickly."

Ms Johnson said schools could face funding problems similar to those now experienced by health trusts that have used PFI extensively.

The National Union of Teachers claimed the authority was putting education at risk by "mortgaging for the future".

"Our children and grand-children will be paying for it," said a spokesman for the NUT's Birmingham branch.

"The building is still owned by the organisation that built it so there is also a democratic deficit."

But Councillor Les Lawrence (Con Northfield), Birmingham City Council cabinet m ember for education, defended the use of PFI, claiming it secured the best facilities the local authority could provide.

"The parents of these young people will expect nothing less. However it saddens me that those who represent teachers criticise this good news and would be happy to leave school staff and pupils working and learning in outdated facilities," he said.

Coun Jon Hunt (Lib Dem Perry Barr), chairman of Birmingham's education scrutiny committee, said the authority had no choice but to go down the PFI route.

"It is the only show in town in terms of getting a major rebuild programme. There were difficulties with the first round of PFIs in Birmingham's schools and you hope lessons have been learned."