To review the Dedicated Schools Grant (DSG) high needs budget for 2020/21 and recommend to the cabinet member children and families for approval.

The schools finance manager introduced the report and reviewed the slides that had been presented to the budget working group. The proposed high needs budget was set out line by line in both the presentation and the recommendations in the cover report. Key points highlighted included:

·         An increase of 13.1% in the high needs grant which resulted in a most welcome increase of £2.2m for 2020/21;

·         A forecast overspend of £1.2m on the high needs budget for 2019/20, predominantly driven by overspends in funding for complex needs cases and out of county places;

·         The overspend would reduce available dedicated schools grant balances to £0.5m;

·         The proposed budget was largely as set out in the autumn budget consultation and was balanced to the funding available, changes from 2019/20 included the extension of the SEN protection scheme to secondary schools and the phased introduction of medical points in tariffs;

·         Given the overspend in 2019/20 and continued pressures the schools finance manager could not be confident that there was sufficient reserve to avoid slipping into a deficit within the next two years;

·         The government had recently changed the rules on deficit recovery so that the council could only contribute with the permission of the Secretary of State, if in deficit the local authority and schools forum would need to come up with a recovery plan;

·         The government review of special educational needs had been expected to report at Christmas but had been delayed, publication was now expected at Easter 2020.

The chair shared a written comment from Nicki Gilbert who was unable to attend the meeting. In her comment she noted that the place funding for special schools of £10k had not increased since its introduction. She welcomed the proposed increase in tariffs but stated that this was a sticking plaster. Finally she recognised that nothing more could be done locally and that changes at a national level were needed to increase funding to special schools.

The head of additional needs confirmed that the £10k per place rate was set nationally and not something that could be changed locally. However the tariffs were being increased and would take account of not being able to increase the £10k.

In response to a query the schools finance manager explained that a number of other councils were in fairly serious difficulties with high needs deficits in some cases over £20m. Herefordshire had so far avoided this by taking action to balance the budgets such as revising how the PRU operated, adding additional special school places and changing SEN tariffs. There was little more that could be done whilst continuing to meet the council’s statutory obligations. With the changes in regulations to prevent councils from contributing to recovery of overspends it was unclear how councils with significant deficits would ever be able to recover those funds. The budget working group had noted that it would ironic if the government did not push for the recovery of deficits given the efforts Herefordshire had made to manage its budgets.  ...  view the full minutes text for item 59