Agenda item

The DSG accumulated deficit has grown rapidly from £3.6 million in April 2019 to £35.8 million by March 2023, with £63.4 million estimated for March 2024 from the high needs funding gap.

As a result of the high deficit, BCP was invited to join the DfE’s Safety Valve (SV) Programme in July 2023. Local authorities with SV agreements are asked to focus on one mission statement: to develop plans to reform their high needs systems as quickly as possible to provide a good service within their available funding, normally by the end of a maximum five-year period.

The deficit growth over 2023-24 reflects an annual DSG high needs funding gap of £27.5 million. The council is required to undertake temporarily borrowing to fund the cash payments. This borrowing cost is estimated to cost the council £2.5m in 2023-24 and is to the detriment of services that it would otherwise be able to provide.

This report outlines the progress made in developing a deficit management plan and next steps underway.

The Interim Education Director 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 DSG accumulated deficit had grown rapidly from £3.6 million in April 2019 to £35.8 million by March 2023, with £63.4 million estimated by March 2024 from the high needs funding gap. As a result of the high deficit, BCP was invited to join the DfE’s Safety Valve (SV) Programme in July 2023. Local authorities with SV agreements were asked to focus on one mission statement: to develop plans to reform their high needs systems as quickly as possible to provide a good service within their available funding, normally by the end of a maximum five-year period.  The deficit growth over 2023-24 reflected an annual DSG high needs funding gap of £27.5 million. The Council was required to undertake temporary borrowing to fund the cash payments. The borrowing cost was estimated to cost the council £2.5m in 2023-24 and was to the detriment of services that it would otherwise be able to provide. The report outlined the progress made in developing a deficit management plan and next steps underway.

There was a new SEN strategy in development with eight priority areas which would be sent to schools in January.  There had been a significant increase in the number of children accessing independent SEN placements. There was £38 million leaving the state-funded schools sector moving into independent provision.

The Assistant Chief Finance Officer advised that there were two scenarios outlined in the paper to balance the budget in 5 years. It was noted that the first provided a sense of scale but was not realistically achievable. The second scenario also presented a number of challenging assumptions but would potentially be deliverable. It would mean a restriction to EHCP support and moving children from independent specialist school to local provision. Assumptions were being looked at further to reduce spend but it was expected that this would take longer than the five-year period proscribed by the DfE. This made it a very challenging environment to meet this from both a financial point of view and to meet requirements for children and families. It was important to think collectively how a balanced budget could be delivered.

The Director for Children’s Services advised that £124 million would be needed over the first five years from the schools block to balance the budget. It was not expected that this would be agreed to There was a robust plan but this would not be what was required to get a deal from the safety valve programme.

Scenario 2 which outlined the £27 million deficit at year 5 had a list of assumptions and the DfE recognised that these assumptions were not unambitious. These included the changing landscape of post 16 provision and fewer pupils moving to specialist schools from the primary sector. The budget had been taken as far as it could be but there was still a forecast £27 million deficit.

In response to a question, it was confirmed that the Council had been invited by the DfE to be part of the Safety Valve Programme and this had been agreed by the Chief Executive. The consultation process was being gone through now, the scenarios were not all worked up in time for the consultation process and were still being worked through and the consultation period was still ongoing, and views were still being sought on scenarios.

The report requested that the Forum make recommendations to the Council concerning the deficit management plan. An example given was for a 10 percent transfer from the schools block.

A 10 percent transfer was not specifically included within the consultation process and a member felt that due to this the consultation was flawed. The Chair made an alternative recommendation as it was not felt that the Schools Forum was in a position to make a recommendation to Council at this time. Due to the further information shared on this issue the Chair proposed and it was resolved:

RESOVLED that the Forum request that the Council come back at the earliest opportunity with 2 alternative models. At least one of these models be a 10 percent reduction including the impact across all schools.

Voting: Unanimous

The Chair requested that this also comes back to Forum members in good time in order for it to be shared with the representative groups.

It was requested that in future that BCP Council’s consultation needed to comply with the relevant section of the “Schools Operation Guide” in order to ensure that the consultation was clearer and operated within the recommended timeframes.

It was also noted that a one year funding proposal was not sufficient to enable head teachers to set three year budgets. It was noted that only those in the safety valve programme were able to move away from the one-year timeframe. It was suggested that an ongoing transfer should also be modelled if the Council were within the Safety Valve Programme.

(Note: This recommendation was proposed and agreed following the recommendations agreed under the Schools Funding Consultation and Budget Proposals 2024)