A council cited as a “success” story of the government’s controversial £1 billion SEND spending bailout scheme for mostly clearing its deficit is facing a £4.5 million black hole.
Richmond upon Thames was given £20 million over five years as part of the “safety valve” scheme. The council was expected to eliminate its high-needs deficit by March this year and reach a balanced in-year budget on its dedicated schools grant by next March.
Richmond was singled out by Susan Acland-Hood, the Department for Education’s top civil servant, during an education committee last year for “all but eliminating their deficit”.
The council had whittled down its deficit to just £300,000 at the time. Richmond later said it had been “highlighted by the DfE as a success” of the safety valve scheme.
SEND spend ‘leaking bucket’
However, council documents now show Richmond predicts a £4.5 million overall deficit at the end of this financial year.
André Imich, a former government SEND adviser, said the evidence is “increasingly pointing” to the safety valve scheme missing its aims.
The programme has been hugely controversial. While councils have been given multi-million-pound bailouts, they come with strict strings attached to slash SEND provision costs. One council involved in the scheme said proposed cuts risks them breaching legal duties to vulnerable children.
Imich added the scheme “shows that the overspend issues are not down to inefficiencies or leadership issues in individual local authorities – who have been provided with additional funding and expert advice, monitoring and challenge from external specialist SEND and financial advisers – but to more fundamental system-wide issues”.
More than half of councils predict they will become insolvent when an accounting loophole to keep high-needs deficits off their balance sheets comes to an end in 2028. Estimates suggest councils’ overall deficit could soon amount to £5 billion.
SEND campaigner Rachel Filmer said thesafety valve programme “was an ill-advised experiment borne of desperation that has demonstrably failed, entirely as predicted”.
“The SEND system now resembles a leaking bucket. The only way to resolve this is with substantial investment that reduces escalation of need and prevents placements breaking down. This is achievable through early intervention and giving children the right support, right away.”
£54m ‘worst-case’ deficit
Despite making headway, Richmond warned in January last year there was a “high risk that within five years the borough will be in the same financial position it was before” the safety valve scheme was introduced.
A few months later, the council was forecasting a best-case scenario deficit of £36 million and a worst-case £54 million. The minutes did not state what date this estimate related to.
Council minutes in January this year also added “that the DfE’s latest communication indicates an acknowledgement that the [safety valve] model has not brought local authorities to the financial situation they had envisaged when the programme started”.
But it was “working hard to balance the ongoing need for cost reduction/cost mitigation with the statutory duty to effectively support young people”.
Lucy Kourpas, chief operating and financial officer at Achieving for Children, a community interest group that runs Richmond’s children’s services, said the overspend “will accumulate each year to create a much larger cumulative debt position”.
Richmond was one of the first councils to get safety valve bailouts. Others have fared worse.
Kingston upon Thames’ bailout ended last year but it still has an £8 million deficit – and predicts this will rise to £18.7 million by March.
The council said it plans to “continuously improve SEND provision and mitigate costs to narrow the local funding gap”.
Other councils fare worse
Hammersmith and Fulham said while the programme “supported the removal of the historic deficit, it did not address the structural gap in our high-needs block allocation compared to our statistical neighbours”. It is predicting a £6.5 million deficit by March.
York council ended last year with a £592,000 surplus, because of the safety valve contribution. But the council’s accountant told the January schools forum that “when those contributions ceased, there would be a significant shortfall”.
Councillor Bob Webb, York’s children’s lead, said while they met deficit reduction targets, “this has not addressed the underlying pressures that exist nationally and that is only a short-term solution”.
The government said last year it will not enter into any more safety valve agreements “pending wider reform of the whole system to prioritise early intervention”.
Five councils that had their payments suspended are still in limbo.
A DfE spokesperson added: “This government inherited a SEND system left on its knees, which is why we are listening closely to families and teachers as we work to make sure more children can achieve and thrive in their local school.”
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