To report on the pressures facing the High Needs budget and to report on progress delivering the Deficit Management Plan (ESFA tool).

The Senior Finance Business Partner (SFBP) introduced the item the purpose of which was to report on the pressures facing the High Needs budget and progress delivering the Deficit Management Plan (ESFA tool). The principal points were noted:

·       The forum was informed of the deficit position in 2021/22 and although the deficit was initially modest, it has risen considerably since.

·       The High Needs DSG block overspent by £5.1 million 2023/24. This increased the Council’s cumulative DSG deficit to £6.1 million at 31 March 2024.

·       The main areas that attributed to this were.

o   Out-county schools (overspend of £2.3m)

o   Special school top-ups (overspend of £0.7m)

o   School top-ups (overspend of £0.8m)

·       The latest forecast end of year position indicates an overspend of £7.6million which means a cumulative deficit of £13.7 million at 31 March 2025.

·       Currently the DSG Deficit is an un-useable reserve on the Council’s Balance sheet and enables all local authorities to ring fence DSG Deficits from the overall financial position in the statutory accounts until March 2026. Once the override periods ends, the deficit will have an impact on the council’s overall financial position a point that is resonating around all local authorities across the country.

·       It was highlighted in the External Auditors annual report 2023/24 the DSG deficit had been a risk to the Council's financial sustainability and recommended close working with schools to manage this expenditure.

·       Mitigating plans currently in place such as nurture hubs, Widemarsh explorers and autism hubs would continue.

·       Future plans for repurposing buildings and the successful bid to build a new 80 place special free school would aid in the reduction of independent provider provision which has been driving up costs.

The forum was asked to consider further strategies to manage spend and mitigate the growing deficit, how the council can encourage cost saving actions in schools and if schools would find an Internal Audit review/self-assessment helpful.

In response to forum questions and comments, it was noted;

1.     The Service Director, Education, Skills and Learning (SDESL) assured the forum that she meets with the department regularly and constantly raises the issues around finance. She noted the lack of transparency and forward planning from the department makes it difficult for the local authority strategically, not knowing when there will be rounds of rebuilding or free school programmes. Strategic partners are sighted on the issues that schools are facing and there has been strong support from Councillor Powell the cabinet member for children and young people. It was highlighted that she would be meeting with the Local MP to ensure they were well informed of the issues.

2.     The cabinet member for children and young people informed the forum that both the County Council's network and the Local Government Association have recently written to the new chancellor (cc:d to local MPs) raising a range of matters to do with pressures on council budgets, but specifically raising the need for sensible levels of financing for special educational needs.

3.     A written response would be provided with regards to the number of pupils that are included within the out of county schools’ placements overspend of £2.3 million.

4.     A written response would be provided with regards to the number of pupils that are anticipated to have their needs met by the new free special school being introduced in 2026.

5.     The SDESL would expect to see over time a reduction in Independent School places as our own provisions grow.

6.     No further cost saving strategies were identified by the forum.

7.     The Director of Finance highlighted that an audit review / self-assessment could provide some assurance and be a useful way to identify good practise.  it could take the form of whatever would be most helpful, and it is not meant to be a further administrative burden in terms of increasing the requirement to respond to audit.

Resolved

That:

a) The forum reviewed the High Needs 2023/24 final outturn budget position;

b) reviewed the High Needs 2024/25 forecast outturn and agreed that regular budget monitoring reports are presented to future school’s forums and

c) reviewed the mitigating actions used in preparing the deficit management plan and managing the DSG deficit.

Action

The SDESL to provide a written response with regards to pupil figures currently included within the out of county school’s placements and the anticipated number that are likely to have their needs met by the new free special school.