Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 29
29
Deferred
Statutory override for Dedicated Schools Grant deficits hides true local authority cost burden
Conclusion
The statutory override that allows local authorities to keep deficits of the Dedicated Schools Grant (DSG) off their books is an unsustainable measure that hides the true cost burden on local authorities. The recent extension of the override until 2028 is a necessary step to protect local authorities from the harmful consequences that would have ensued if it had ended in March 2026. As long as the override is in place, local authorities’ accounts will diverge further from reality, and it must not be extended further beyond
Government response summary AI-generated
The Government did not address the sustainability of the Dedicated Schools Grant (DSG) deficit override, instead outlining a commitment to review the Code of Audit Practice by the end of 2027 and championing auditors' statutory reporting powers.
Summary of the government's response below — read the verbatim text to verify.
Government Response
Deferred
HM Government · verbatim extract
Deferred
52. The Government recognises the pressures local authorities are facing because of their Dedicated School Grant deficits. The Department for Education Spending Review settlement confirmed funding for reform of the current Special Education Needs and Disabilities (SEND) system, details of which will be set out in a White Paper in the coming months. 53. The Government recognises that local authorities will need continued support during the transition to a reformed SEND system. This will include working with local authorities to manage their SEND system, including deficits, alongside the extension to the Dedicated Schools Grant Statutory Override, which is now due to expire at the end of 2027–28. The Government will provide more detail in the coming months, including a plan for supporting local authorities with both historic and accruing deficits. We will set out more detail at the provisional LGFS.
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