Agenda item

Report of the Deputy Chief Executive and Director for Families and

Communities

As part of the last Spending Review the Government had announced a further £780m for High Needs Block in 2020/21. For Staffordshire the HNB would be around £89m in 2020/21, an increase of £12m (15%) compared to 2019/20. As in previous years the schools block would be ring-fenced in 2020/21, with the option to transfer 0.5% of the Schools Block funding into central school services, high needs or early years blocks, subject to the approval of Schools Forum. Members were reminded that Staffordshire’s request to transfer 0.5% from the Schools Block to the High Needs Block had been refused by the Forum in November 2019.

In 2020/21 the HNB budget was £89.1m. This was a net increase of £9.5m from 2019/20.The increase had been passed on in full for the provision of SEND which ensured Special School budgets for 2020/21 had been set in line with approved rises for maintained schools and that additional capacity had been provided for the roll out of the District Hubs. Concern remained that despite the additional Government funding a shortfall remained, with a forecast overspend this year of circa £2m.

In 2021/22 the Government had confirmed a further additional investment in HNB. Based on initial estimates Staffordshire’s budget for 2021/22 would increase to c£100m. However there remained a risk that ongoing increases in cost and demand for SEND support would see the funding gap developing again over the medium term by up to £7.5m if not addressed.

The SEND and Inclusion Transformation was intended to improve outcomes for Staffordshire’s children and their families, aspiring to an inclusive system underpinned by restorative practice and integrated into the District Footprint. Members received details of these developments which were expected to provide a more sustainable model, improve relationships with district and school partners and deliver improved educational and life outcomes for children and young people. It would also enable effective management of demand and provide quality support within approved funding levels.

Members were aware that, as a result of the on-going overspend in the HNB over the last few years, the DSG reserve had been fully depleted and could no longer be used as a buffer to fund on-going pressure. Under new Government guidance any LA with an overall deficit on its DSG account at the end of 2019/20 financial year, or whose DSG surplus had substantially reduced during the year, must produce a plan for managing their future DSG spend. Whilst Staffordshire was not in deficit, the sharp DSG decline in recent years meant that a “management plan” was required to avoid DSG reserves falling into deficit. The Forum heard that a DSG reserve of not less than £4m should be maintained. At their meeting of 16 January 2020 the Forum had agreed that surplus Growth Fund money could be transferred to the Council’s DSG reserve for 2020/21. This was around £2.5m and would mitigate the forecast HNB overspend. In 2021/22 and going forward it was anticipated that the HNB would be managed within overall budget. Any surplus Growth Fund in 2021/22 could again be transferred to the DSG reserve.

The Forum noted that whilst previous Government advice had suggested that a buffer of between 2.5% - 5% was appropriate, the level of appropriate reserve was now left for each LA to determine.

The Forum’s High Needs working group had previously put forward a number of ideas to support working towards a calmer budget and it was suggested that the Group be re-established to consider which of these could be taken forward. Reports had been brought to the Forum outlining developments within the HNB.

Members also shared concerns at the cost of independent school placements. A thorough review of this sector was being undertaken, with consideration given to the impact of spend in these placements. The Forum suggested a working group be re-established to consider this and other HNB issues.

RESOLVED – That the following be noted:

a)    the High Needs Block budget 2020/21 and latest forecast outturn;

b)    the latest budget assumptions 2021/22 and going forward;

c)    the SEND stabilisations and Transformation Programme update;

d)    the Council’s DSG “Management plan” to ensure reserve balances do not fall into deficit;

and

e)    that a working group to consider HNB funding be re-established.