Local authorities are currently starting to put together their budgets for 2023/24. Upper Tier Authorities with responsibility for the High Needs block of the Direct School Gant that deals with expenditure on pupils with special needs will be looking at a year-end overspend in many cases that will need to be added to the amount already sitting off-balance sheet in a temporary solution to the problem of how to pay for this expenditure. The money has been spent by the local authority, but not paid for by central government, so it sits awkwardly in an account waiting for a solution.

At some point, if the DfE or The Treasury deems that the local authority should no longer carry the deficit, but fund it from reserves, this would be a major headache for, I suspect, many local authorities, regardless of their political control. In the present financial climate, the solution is more challenging than it might have been a year ago. As a result, I expect the government to ‘kick the can’ further down the road extending the current arrangement until March 2024, and leaving local authorities with even bigger numbers to worry about.

How might the issue be solved? Before devolved budgets came into being for schools in the 1990s, authorities might just have top sliced their education budget. I cannot see Schools Forum, the body that discusses education funding at a local authority level, agreeing to such a move these days, although the DfE could no doubt mandate it somehow.

An alternative would be to use the precept method, as has been used for social care funding, by allowing local authorities to increase Council Tax by an amount to cover the deficit they have incurred that is not on their balance sheet, but in ‘reserves’. This passes the problem to local taxpayers, despite schooling now being a centrally financed activity.

The government at Westminster could just pay off the figure authorities have in their reserves, either in one lump sum or more likely over a period of several years. But, with their demands for cuts in public expenditure to finance tax cuts, this seems an unlikely option.

Increasing pupil numbers, better healthcare and the acceptance of new medical conditions was always going to put increased demand upon a school system and its funding for pupils with special needs, and especially one that both had not always planned for the changes and was required to do more after the switch to EHCPs from Statements of Need following the 2014 Education Act. A good example of worthy legislation that doesn’t seem to have been fully costed as to its on-gong effects.

Meanwhile, parents probably see declines in service locally, as officers struggle to keep the costs of running the service within bounds. These parents often carry a heavy burden caring for their offspring and fighting a local government system is not something they want to do, but sometimes are forced to undertake. There must be a solution that puts the needs of these young people first.