As reported by CYP Now, BCP council could accumulate a £92m deficit on its dedicated schools grant (DSG) by March 2025, warns a report, citing the increasing costs of specialist provision for children with education, health, and care plans
It highlights that the deficit is due to more than a third of children in the area with education, health and care plans (EHCPs) accessing specialist provision which “is more expensive than that provided through mainstream education”
This extends to pupils in post-16 education of which four per cent of those with EHCPs are accessing specialist provision compared with a national average of 1.6 per cent, according to the report.
“Overall, the cost attributable to children and young people accessing specialist provision has increased from £39.1m in 2021/22, to £45.2m in 2022/23 and is forecast at £54.7m for 2023/24,” it states.
The council has also warned that an increase in the use of alternative provision due to growing numbers of children being temporarily and permanently excluded from school has contributed to the deficit.
At the end of the 2022/23 BCP witnessed 118 permanent exclusions with a further 41 children being permanently excluded to date during the current academic year.
The report states that this is “placing a further pressure on the high needs block budget of the DSG”, with the cost of AP arrangements said to be between £25,000 to £30,000 annually for settings run by independent providers.
“The budget outturn for 2022/23 was £3.7m and for 2023/24 is forecast at £5.8m,” the report adds.
It warns that government accountancy rules could be responsible for the council’s imminent risk because of insolvency.
Since 2020 the government has placed a “statutory override” on education deficits meaning they are excluded from assessments of councils’ financial health, however, this is due to end on 31 March 2026.
BCP’s report states: “When the statutory override falls away, the accumulated DSG deficit will be greater than the council’s total reserves and the council will technically be insolvent.
“If the deadline is not extended, then it is expected that the council’s director of finance would need to issue a section 114 notice in December 2024 as it would not be possible to set a balanced budget for 2025/26.”
It also warns that if the override is not extended, the council will have to consider taking funding from its overall schools budget to balance the books, leading to cuts elsewhere in mainstream and SEND services.
Since 2018, eight councils in England have issued section 114 notices, effectively declaring themselves bankrupt.
A Local Government Association spokesperson told the Guardian: “We continue to call for the government to write off all high-needs deficits as a matter of urgency to provide certainty and ensure that councils are not faced with having to cut other services to balance budgets through no fault of their own or their residents.”
BCP Council was formed in 2019 as merger of the three Dorset local authorities.
In June 2021, inspectors from Ofsted and the Care Quality Commission, found that the council’s SEND services were blighted by a “blame culture” and “lack of urgency” to improve, inspectors have found.
The Department for Education has been contacted for comment.
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