Issue - meetings

The report considers the end of year position for the DSG budget 2025-26. The outturn is an in-year funding gap of £66.6m. This is £9.1m more than the budget, but an improvement compared with the quarter three forecast.

The budget was set with the expectation that the innovation fund would start to have impact in reducing the demand for education health and care plans (EHCPs) alongside the creation of new SEND places in mainstream schools through capital investment to limit the use of higher cost independent provision. There is delay in both initiatives and the SEND reforms announced by government during the year have further fuelled demand. The result has been greater use than budgeted of high-cost independent school places, alternative provision and bespoke arrangements for children and young people unable to attend any school setting.

The trajectory of the accumulated deficit has therefore continued a significant upward path from £113.3m for March 2025, to almost £180m for March 2026. This deficit is carried forward by the council in a specific negative reserve by a statutory override that suspends the normal accounting practice.