SEND

Third of ‘safety-valve’ councils face ‘bankruptcy’

Local authorities receiving bailouts in exchange for savings plans still fear they won't set balanced budgets

Local authorities receiving bailouts in exchange for savings plans still fear they won't set balanced budgets

Exclusive

More than a third of councils with “safety-valve” deals to plug high-needs deficits face bankruptcy, despite being set to receive more than £1 billion in government bailouts before the end of the decade.

Since 2021, 38 councils with eye-watering SEND deficits have had to strike deals that give them annual cash injections in return for savings plans – with strings attached.

In 2020 the government overrode standard accounting rules, letting councils keep dedicated schools grant (DSG) deficits off their general revenue books, which enabled them to set overall balanced budgets.

That override is set to end in 2026, after which it was hoped councils would have eradicated these deficits.

But more than a third (38 per cent) of the 28 safety-valve councils that responded to a freedom of information request admitted they were at risk of issuing a section 114 notice – meaning they could not balance their budgets – in the next three years.

This was partly driven by the escalating cost of SEND provision.

Section 114s restrict council spending to the statutory minimum, forcing more curbs to SEND services.

‘Not on track’

Stoke-on-Trent said it was facing “a risk of section 114 due to pressures and demands across all of children’s services”. It was “not on track” to balance its DSG deficit by 2025, as agreed in its safety-valve deal, with its officers in “constant dialogue with the DfE”.

North Tyneside’s risk of not being able to ensure financial sustainability without raiding reserves is currently flagged as an “A1 risk” with “very high likelihood”.

However, the authority said this did not mean that it expected to issue a section 114 notice between now and 2028.

Bath and North East Somerset is one of five councils whose safety-valve deals are currently “subject to review” after it failed to hit spending targets.

The authority joined the programme in 2022-23, securing a deal for £19.2 million – but after overspending in its high-needs block by £9.3 million in 2023-24, “grant payments have been suspended”, council papers said.

Scott Gardner, senior SEND accountant for Achieving for Children, which runs Richmond’s children’s services, said it had been “highlighted by the DfE as a success of the [safety valve] programme”.

“However if the funding ceases there is a high risk that within five years the borough will be in the same financial position it was before [it] was introduced.”

Dorset is “making progress”, but this has “not yet translated into financial savings or efficiencies”.

The council expected to end the 2022-23 financial year with a £10.4 million high-needs deficit, but it almost doubled to £19.7 million. In March 2024 its £24 million deficit was more than triple a predicted £7 million.

Council officers recently met with DfE colleagues to “find a way forward”.

‘We’ll be effectively bankrupt’

Bristol’s DSG deficit rose to £58.6 million at the end of 2023-24. It received only £21.5 million in safety-valve funding from the DfE to offset this, leaving it carrying over a £37.1 million deficit into this year.

Steven Peacock, its chief executive, warned recently of the SEND bailout: “If we get this wrong, we’ll be effectively bankrupt.”

Councils are also missing their targets to reduce EHCPs under the agreements, as demand for SEND support soars. 

More families are also objecting to council decisions. In 2022-23 the number of SEN appeal outcomes rose by a third to 12,000, of which 8,000 were decided by tribunal. Ninety-eight per cent of tribunals found in favour of families, up two percentage points on the year before.

A third of the responding safety-valve councils said the risk of them not being able to deliver their statutory duties for SEND children had risen in the previous year, with a quarter saying it had remained unchanged.

Catriona Moore

All but one of Bath and North East Somerset’s three special schools and six resource bases are “full or oversubscribed”. It has “struggled to meet its statutory duties” and “had to rely on expensive out of area placements”.

A new SEND advice service the council is launching in September will aim to reduce EHCPs” and to “focus on data”.

Councils are also being hampered by disorganised commissioning of SEND services.

In the 32 Ofsted area SEND inspections since January 2023, almost a third were graded 3 (with systematic failings), another third 1 (typically positive), while almost half were 2 (inconsistent).

Catriona Moore, policy manager at the Independent Provider of Special Education Advice, warned recently that safety-valve councils’ targets, which include reducing EHC needs assessments, risk councils “exposing themselves to more legal challenges than ever”.

Latest education roles from

Higher Level Teaching Assistant (HLTA)

Higher Level Teaching Assistant (HLTA)

Platanos College

Teacher of Boys’ PE

Teacher of Boys’ PE

Platanos College

Head of Girls’ PE

Head of Girls’ PE

Platanos College

Art Teacher

Art Teacher

Platanos College

EA to the CEO & Senior Directors

EA to the CEO & Senior Directors

Haberdashers’ Academies Trust South

Head of Faculty (History and RS)

Head of Faculty (History and RS)

Ark Greenwich Free School

Sponsored posts

Sponsored post

How can we prepare learners for their future in an ever-changing world?

By focusing their curriculums on transferable skills, digital skills, and sustainability, schools and colleges can be confident that learners...

SWAdvertorial
Sponsored post

Inspiring Education Leaders for 10 Years

The 10th Inspiring Leadership Conference is to be held on 13 and 14 June 2024 at the ICC in...

SWAdvertorial
Sponsored post

Inspire creativity in your classroom. Sky Arts’ Access All Arts week is back!

Now in its third year, Access All Arts week is a nationwide celebration of creativity for primary schools (17-21...

SWAdvertorial
Sponsored post

Unleash the Power of Sport in your setting this summer! National School Sports Week is back!

Unleash the Power of Sport this summer with National School Sports Week powered by Monster Kickabout! From 17-23 June,...

SWAdvertorial

More from this theme

SEND

SEND: Number of EHCPs soars by highest rate in 6 years

But around half are still not issued by the 20-week legal deadline

Freddie Whittaker
SEND

SEND: DfE ‘looking into’ how many schools are not inclusive

Children's minister David Johnston reveals he is probing why some schools have far fewer pupils with EHCPs

Samantha Booth
SEND

Revealed: Locations of 16 new special schools and trusts to run 7 more

It follows the announcement of £105m capital cash at the spring budget

Freddie Whittaker
SEND

SEND: Some safety valve councils have ‘removed’ deficits – DfE boss

Permanent secretary says government is 'seeing some really good progress from councils'

Freddie Whittaker

Your thoughts

Leave a Reply

Your email address will not be published. Required fields are marked *