Agenda item

          The Forum was presented with the DSG Forecast Outturn for 2025/26.

          The finalised Dedicated Schools Grant allocation for 2025/26 is £168,645,754, following Department for Education’s revisions to the Early Years and High Needs blocks:

• Schools Block £117,833,053
• CSSB £765,250
• Early Years Block £20,287,728
• High Needs Block £29,759,723

          It was noted that there was an increase in cost pressures for the High Needs Block, and it was known that the Council would overspend the allocation amount; it was expected that the Council would overspend by £12.5 million. The cost increases came from the independent specialist school placements that Halton children were in; these placements were just under £10,000 on average. Significant pressures were not expected from the Early Years Block but a significant overspend in this block was unlikely. The overall DSG was predicted to be £18 million at the end of 2026. The Council had to provide the excess funding that the DSG did not cover.

          Officers agreed to provide the statistics on how much money would be needed if money was not invested into expanding school SEND and EHCP provision.

          Having specialist school placements in borough was the most cost-effective option. The English national average of specialist school placements staying in borough was 43% but it was 55% in Halton. It was not expected that there would be an increase of children being placed in independent specialist schools. Having a positive relationship with the resource provision at schools was vital to meet the needs of EHCP pupils in borough. The Service Level Agreement stated that match funding was available through a child’s EHCP, and more financial work was planned in the future.

          When the white paper from Central Government is published, there will be a statutory override for the DSG which meant that the deficit would have to be absorbed into the Council’s budget. Ahead of this, every local authority was being appointed an independent financial advisor by the DfE to determine the effective oversight of DSG overspending to ensure that it is kept at an appropriate level. This was because at least part, if not all, of the High Needs Block will be managed by Central Government.

          The Forum agreed that they should format a response on the escalating costs for SEND and EHCP provision and that there would never be enough money to resolve the financial burden this causes. The response should also highlight that there should be a radical change in the funding formula for the Nigh Needs Block.

          Regarding the projection for the High Needs Block, officers said that this work will be investigated in 2026 with the DfE appointed financial advisor. Service improvements will be factored in as part of this work, and they would need to ensure that the current strategy was fit for purpose. No additional funding was available to meet SEND and EHCP provision other than the funding from the High Needs Block. Money was transferred from the School Block to the High Needs Block in the past, but this did not alleviate the issue.

          It was noted that the allocation for the High Needs Block was done outside the funding formula. Central Government had frozen allocations for 2026 from 2025 because of the changes planned in the white paper.

          The Forum requested that they receive the recommendation paper from the DfE appointed financial advisor on the effective use of DSG.

          RESOLVED: That the report be noted.