Agenda item

The Schools Forum received a report from the Director of Children and Families relating to the High Needs Block (HNB).

Members heard that the forecast outturn for the 2022/23 High Needs Block was £7.8m overspend which was an increase on the Quarter 2 forecast overspend by £1.8m. Demand continued to exceed capacity – this impacted specifically on the Independent Sector, with placement numbers nearing 575 - nearly double what they were in 2020. These were more expensive placements and represented the most significant budget pressure in the HNB. There had also been a small increase in the post-16 demand and Pupil Referral Units (PRU) placements due to an increase in exclusions.

As a result of the on-going overspend in the HNB the DSG reserve had been fully depleted and at the end of 2021/22 was in deficit by £8.6m. Given the forecast overspend 2022/23 it was likely that the deficit would increase to c£16.4m. Going forward it was anticipated that demand – and costs – would continue to increase in line with historic rises. Given the anticipated annual HNB overspend, this could see the overall accumulated DSG deficit increase to between £70m and £100m by the end of 2026/27.

A longer-term financial management plan to recover the deficit, using the ESFA recommended ‘deficit management plan’ (DMP) template had been developed and was consistent with the actions and objectives outlined in the Council’s Accelerated Progress Plan and wider SEND Strategy. A key part of the DMP was for a funding transfer of 0.5% from Schools Block to High Needs Block in 2023/24. This was rejected by Schools Forum in November 22 and as such the Council had made a disapplication request to Secretary of State to approve the transfer; at this point it was not known if that request had been approved.

A HNB working group met on the 9 January 23 to discuss the modelling and assumptions that made up the DMP in more detail. The Chair provided a brief overview of the discussions that took place during the working group session, primarily focussing upon the desired outcomes of the meeting, the primary causes of the deficit issues, forecast budget pressures, forecast accumulated DSG deficit and the proposed savings to mitigate the shortfall. It was agreed that the presentation given to participants of the working group session would be shared with Schools Forum members.

In response to a question relating to the maintained schools need for access to support when dealing with the behaviour of challenging children, and the excessive costs associated with PRUs, it was explained that it was a primary task of the Strategy for Special Provision, which was currently in development, to enhance the provision in various localities across the County, which could lead to an enhanced resource-based provision that would allow children to access support without the need for an EHCP. It was expected that this would help to support mainstream schools’ in their endeavours to meet the challenging behaviour of some children. It was also explained that this would be a shared activity between Schools and the Local Authority, with Special Heads, Mainstream Heads, Clinicians and Educators all involved in the various workstreams. The consultation for the model would take place towards the middle of the Spring term in 2023. It was noted that this was not the first time a strategy or policy had been developed to improve this position and reduce the number of independent providers, it was hoped that this process would prove more successful.

In response to a question asking if the countywide review of special provision included the independent sector, it was clarified that independent schools were included in the statistics and data that was being sent out, however it was clarified that there was very little power the Local Authority had to implement change. However, it was hoped that change in the independent sector would be influenced by implementing change throughout the entire provision.

The Forum was informed that the indicative High Needs Block allocation for 2023/24 would be c£122m, which was a rise of £7m (6%) compared to 2022/23. This was consistent with the funding levels previously assumed and reflected in the forward projections and Deficit Management Plan. In the recent Autumn Statement, the Chancellor confirmed additional funding for schools of c £2bn nationally of which £400m would be directed to the HNB. It was estimated that Staffordshire would receive a further £4.8m in 23/24. Part of this additional funding had to be used to provide additional support to Special Schools (and PRUs). Payments would be made equivalent to 3.4% of the estimated total grant funding for each school. This additional funding was on top of mandatory Minimum Fund Guarantee (MFG) calculations for 23/24.

In response to a question relating to supplementary grants and why Special Schools were only receiving 3.4% uplift, compared to the uplifts highlighted in the Schools Block, it was confirmed that these were set by Government. It was also confirmed that this would be a cash lump sum payment that would be paid in the 2023/24 and 2024/25 financial years.

Resolved: That the update on High Needs Block (including Education Banding Tool update and Deficit Management Plan) be noted.