Agenda item

Elizabeth Griffiths introduced the report (Agenda Item 9), which sought to inform the Forum on the outturn of the services funded by the Dedicated Schools Grant (DSG), highlighting any under or over spends, and to highlight the cumulative deficit at 31st March 2025 of £16.13m, projected to rise to £31-£37m in March 2026.

Elizabeth Griffiths raised that the key concern was the rate at which the overspend was rising, which was due to increasing pressure on the High Needs Block (HNB). There was currently a statutory override in place until March 2026 however, interest was having to be paid (currently at around £1.5m per annum), which was creating a revenue pressure on the Local Authority (LA). There was no clear direction from Government regarding what would happen to balances once the statutory override was removed in March 2026. 

Keith Harvey said that he had written to his MP about the deficit, particularly within the high needs budget, asking for a response from the Secretary of State for Education. He would share the reply when he received it.

Trevor Keable enquired about the impact of the deficit on the overall education budget for West Berkshire. Elizabeth Griffiths reported that they would not be looking to decrease the education budget by £1.5m to compensate the interest being paid however, it was an overall pressure to West Berkshire. Many would be aware that West Berkshire Council had needed to seek exceptional financial support, and this was because the LA no longer had enough funding to cover its expenditure.

Reverend Mark Bennet raised concerns about the Schools’ Forum’s lack of visibility over the cost of financing the deficit that had been accumulating. He asked what the rationale had been for treating the interest in this way and he queried the amount of interest that had already needed to be covered by other budgets to support the deficit. Elizabeth Griffiths explained that LAs had to balance their overall position, and it was not always possible to attribute costs directly because there was not always capacity to do this. It had been difficult for LAs due to rising social care costs and this inevitably put pressure on other areas. The LA was constantly trying to navigate its way thought a difficult situation and it had gone back out to services in the current year asking for further savings.

Reverend Mark Bennet commented that in a sense the Forum had been accountable for the deficit but not for the cost of financing it and he did not feel that this was the right approach.

Councillor Heather Codling agreed with Elizabeth Griffith’s comments and that it was largely a juggling act. Not having the funding was preventing the LA from doing other things. Councillor Codling acknowledged the financial challenges facing LAs and emphasised that it was a national issue. Councillor Codling commended the work undertaken by Officers to keep budgets down.

Neil Goddard stated that the education department formed part of the overall Council, and savings were expected like they were for other areas of the LA, which had an impact. He noted that the Government’s statement on this was that they would produce a fully costed, but not necessarily funded, special educational needs and disabilities (SEND) plan in the near future. It was clear that the system was not currently working, and he highlighted that other LAs in neighbouring areas had much higher deficits than West Berkshire. Scrutiny of what was spent against the HNB, particularly having been through Delivering Better Value, continued to be very high to ensure spending was happening in the right way. The vast majority of the HNB budget went to schools so the pressure to create savings in this area would lead to schools being given less money for SEND. He was aware schools were already struggling to balance budgets so having less money for SEND would make this even more difficult. The LA was trying to be as creative as it could be across the LA’s budget as a whole however, it was a national issue. The statement from Government might confirm continuation of the statutory override but at least this would provide more certainty that the situation currently, where S151 Officers were having to manage an unreasonable level of risk.

Trevor Keable asked about the legal responsibility of the Schools’ Forum on education budgets. Neil Goddard explained that this could form part of the review of the Forum’s terms of reference. The Schools’ Forum's role has changed significantly, with limited flexibility due to the national funding formula. The HNB was the responsibility of the LA and it was required to consult with the Schools’ Forum and take views. The Forum could scrutinise the local authority and make comments regarding how the HNB was used and they were fortunate to have Councillor Codling present at Forum meetings, who was able to communicate and reflect on discussions with the Executive. The aim was to manage all blocks as effectively as possible. Neil Goddard highlighted that the central schools services block was being reduced year on year, so the pressure was increasing in this area too. Neil Goddard commented that the terms of reference for the Forum needed to clearly set out its statutory decision making responsibilities, areas of statutory consultation and areas of joint working across the broader area.

Richard Hand stated that he had read that one option the Government might consider was writing off a portion of the debt and the interest. He was not sure how credible this was due to the size of the situation. Neil Goddard felt that it would be impossible for the Government to write off the debt without some sort of contribution or demonstration of commitment to savings. It was possible the Government might offer a contribution linked to local government reorganisation however, this was not yet confirmed. Elizabeth Griffiths agreed and thought it would be very difficult for the Government to write off the debt. Neil Goddard added that the Government could allow LAs to charge the interest to the DSG itself. This would cause the deficit to increase more quickly however, would take the pressure off LAs. He was not sure this was a route the Government would choose but it could not be discounted. More certainly was need.

RESOLVED that the Schools’ Forum noted the report.