Issue - meetings

The report considers the end of year position for the DSG budget 2024-25. The budget was set with a funding gap of £28m, a similar level compared with the previous year, with the expectation that the innovation fund and other initiatives would start to have impact in reducing the demand for education health and care plans (EHCPs). This was alongside the creation of new SEND places in mainstream schools through capital investment to limit the use of higher cost independent provision.

The outturn is a net in-year funding gap approaching £50m. This is £5m more than indicated at quarter three. There is an element of one-off additional high needs spending over the final quarter, but it is likely most previously unforeseen costs will be on-going.

More children are remaining in mainstream schools but the growth in demand for EHCPs overall has more than offset any potential savings. The demand has continued to grow for independent school places, alternative provision, and bespoke arrangements for those unable to attend any school setting.

The trajectory of the accumulated deficit has therefore continued a significant upward path from £65.5m for March 2024, to £113.3m for March 2025.

The Assistant Chief Finance Officer presented a report, a copy of which had been circulated to each Member and a copy of which appears as Appendix 'A' to these Minutes in the Minute Book.

The report considered the end of year position for the DSG budget 2024-25. The budget was set with a funding gap of £28m, a similar level compared with the previous year, with the expectation that the innovation fund and other initiatives would start to have impact in reducing the demand for education health and care plans (EHCPs). This was alongside the creation of new SEND places in mainstream schools through capital investment to limit the use of higher cost independent provision.

It was noted that the three blocks—early years, central school services, and school block—were broadly balanced. However, the high needs block showed a significant funding gap, with the outturn exceeding previous forecasts.The outturn was a net in-year funding gap approaching £50m. This is £5m more than indicated at quarter three.

More children were remaining in mainstream schools but the growth in demand for EHCPs overall has more than offset any potential savings. The demand has continued to grow for independent school places, alternative provision, and bespoke arrangements for those unable to attend any school setting. The trajectory of the accumulated deficit has therefore continued a significant upward path from £65.5m for March 2024, to £113.3m for March 2025.

It was noted that national trends indicated that deficits were growing and nearly doubling annually. The statutory override for deficits had been extended to March 2028. Government support was anticipated in the local government provisional finance settlement later in the year.

RESOLVED that the report be noted.