Issue - meetings

This report sets out the detailed forecast for the high needs block (HNB) of the DSG in 2024-25 and the following 4 years.  

The in-year shortfall in funding next year (2025-26) is forecast to be £60.2million before any contribution from schools block.  A further increase to £70.7million in 2026-27 is expected before the increases to the shortfall begin to slow in 2027-28 and 2028-29.  The cumulative deficit at the end of March 2029 is forecast to be £384.7million assuming the transfer from schools block is supported.

The Management Accountant for Education presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'B' to these Minutes in the Minute Book. The Forum was informed that the report set out the detailed forecast for the high needs block (HNB) of the DSG in 2024-25 and the following 4 years. The in-year shortfall in funding next year (2025-26) was forecast to be £60.2million before any contribution from schools block. A further increase to £70.7million in 2026-27 was expected before the increases to the shortfall begin to slow in 2027-28 and 2028-29. The Forum was advised that the cumulative deficit at the end of March 2029 was forecast to be £384.7million, assuming support for the transfer from the schools block.

The Forum questioned whether the Council had been able to discuss with the government the risks associated with the deficit and the impact on the long-term picture and what can and can’t be allowed. There were ongoing conversations with government on this issue. A local MP had written to the Secretary of State for Education. In terms of the statutory override, it was anticipated that this may be extended beyond March 2026 as it would take some time to resolve the issues. The current issue was that local authorities were not allowed to borrow for revenue costs and therefore most of this was being funded by cash reserves. The immediate issue was that the cash reserves were likely to run out during the next financial year. A potential option to address this would be to change some of the rules around revenue borrowing.

It was noted that there needed to be some support to resolve the immediate issues until the expert panel had made its recommendations.

The Forum noted the current and forecasted positions.