Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 18
18
Accepted
Paragraph: 118
Temporary funding fails to resolve fundamental mismatch in Dedicated Schools Grant and SEND costs.
Conclusion
The Government’s use of the statutory override and one-off ‘safety valve’ funding are temporary measures and do not address the underlying mismatch between demand, costs, and annual Dedicated Schools Grant funding. They will not prevent local authorities from accumulating further deficits until the underlying mismatch is resolved, and we do not believe it is realistic to expect local authorities to manage down deficits of the scale of many billions of pounds in total over a period of two or three years. Without significant additional funding via the DSG to match service demand and costs, or a further extension to the statutory override - which would, at most, offer a further period of temporary respite - the sector faces a cliff-edge of section 114 notices.
Government Response Summary
The government acknowledges the concern about funding mismatches but states it is already addressing the issue through significant increases to the high needs budget, existing Safety Valve and Delivering Better Value in SEND programmes with additional funding, and published guidance.
Paragraph Reference:
118
Government Response
Accepted
HM Government
Accepted
29. The Government agrees that close, bilateral working between DLUHC and DfE is important in tackling issues with the cost of SEND provision. The Government seeks to improve the outcomes and experiences of children and young people with SEND and those who need alternative provision, while placing local authorities on a sustainable footing. This will enable local authorities to ensure all young people with SEND receive the support they need, on a sustainable basis. 30. We have been clear that all local authorities must take responsibility for the effective and sustainable management of their high needs systems and associated spending. The high needs budget is rising by 60% over five years from 2019-20 (it will increase to £10.5 billion in 2024-25). Around a third of local authorities have no deficit, and some have been contributing to their DSG surpluses in the last two years. 31. However, we recognise that, for some local authorities, there is an urgent need to resolve issues with the sustainability of their high needs systems, and the Government is supporting them to do so. We are focusing our support in two ways: supporting local authorities to make sustainable change at a local level in the short term, whilst developing longer term reform of the national system. 32. At present, DSG deficits are ringfenced from local authorities’ wider financial position to give local authorities the short-term flexibility to implement sustainable change at a local level. This ringfence, reinforced by Government’s longer-term reform plans and substantial increases in high needs funding, will remain in place up to March 2026. 38 local authorities with the highest deficits now have Safety Valve agreements which, if delivered by the individual authorities, will see them deliver a sustainable high needs system and eradicate their deficits. These agreements set out the realistic and achievable steps that authorities can take at a local level to manage their budgets sustainably, and eliminate their DSG deficits, supported by around £1 billion of additional funding, and bespoke, expert support for each authority. Further authorities have and will continue to be invited to the Safety Valve programme in 2023-24 and 2024-25. 33. 55 local authorities have been working with the Government through the Delivering Better Value in SEND (DBV) programme and developing plans to reform their systems to reach a sustainable footing. Like the Safety Valve programme, this programme seeks to develop individualised local plans for sustainability, including grants and expert help. 34. The Government has also published a research report and accompanying guidance, drawing on good practice in local authorities, and the Department for Education’s ongoing intervention work.