Issue - meetings

Finance Update - Dedicated Schools Grant (DSG) 2025-26 Budget Monitoring a Quarter Two

 

 

Meeting: 24/11/2025 - Schools Forum (Item 27)

27 Finance Update - Dedicated Schools Grant (DSG) 2025-26 Budget Monitoring at Quarter Two pdf icon PDF 276 KB

The 2025-26 quarter two budget monitoring position for the DSG being reported to the council’s Cabinet on 26 November is a projected increase in the high needs annual funding gap from the budgeted gap of £57.5m to a year end projection of almost £72m. This reflects higher than expected growth in demand in the later months of the last financial year, with this unabated and with a significant increase in average costs of provision.

Other DSG budgets for 2025-26 are forecast to be balanced. 

The cumulative deficit on 31 March 2026 is projected to be £183m

Minutes:

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

 

The Forum was advised that the 2025–26 quarter two budget monitoring position for the DSG, which had been reported to the Council’s Cabinet on 26 November, showed a projected increase in the high needs annual funding gap from the budgeted gap of £57.5m to a year-end projection of almost £72m. This reflected higher than expected growth in demand in the later months of the last financial year, which continued unabated, along with a significant increase in average costs of provision.

 

Other DSG budgets for 2025–26 were forecast to be balanced. The cumulative deficit on 31 March 2026 was projected to be £183m.

 

During discussion, Members noted the following key points:

 

  • Independent and non-maintained placements have risen significantly, with forecast expenditure of £38.7m, an increase of 28% from budget.
  • The Forum expressed concern regarding the sustainability of the current funding model and the continuing upward trajectory of costs.
  • Members requested detailed information on the average cost per placement by type, including post-16 and post-19 provision, and a breakdown by need type. ACTION

 

The Assistant Chief Finance Officer confirmed that the statutory override remains in place until March 2028, allowing the deficit to be carried forward without impacting the Council’s general fund.

 

RESOLVED that:

  • The Forum noted the contents of the report and the projected DSG position for 2025–26.