Tag Archives: statutory override

SEND funding switched to schools?

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Has the funding of SEND just become even more complicated for 2026-27? Under the arrangements announced by the DfE, cash has moved from the High Needs Block to other funding streams within the Dedicated Schools Grant.  Dedicated schools grant (DSG): 2026 to 2027 – GOV.UK

Now I am no expert in schools funding, and the labyrinthine calculations employed by the DfE in deciding both the size of the cake and its distribution.  However, it does seem as if all local authorities will see their High Needs Block funding stream reduced in 2026-27 when compared with 2025-26. As seem usual, some London boroughs have been less affected by the change than other upper tier authorities, with 10 of the 20 local authorities with the smallest percentage decrease being London boroughs. There are no London boroughs within the top 20 authorities with the largest percentage reductions, with the highest ranked London borough coming in at 23rd place.

Oxfordshire, where I served as the Cabinet member until May’s elections, has seen a decline of 18.75% in its High Needs block. That decline ranks it in the top 25 local authorities for the largest reductions in their High Needs Block. Hopefully, the cash has been distributed to schools, but the Schools Block for the County has also reduced, by around £5 million – effectively a standstill. No doubt the reduction is due to falling pupil numbers on a formula that is heavily driven by pupil numbers. The implications for schools faced with falling rolls was discussed in my blog post How might a school react to falling rolls? | John Howson

What does the DfE say about the High Needs block changes?

16. As the existing SEND system will continue for 2026 to 2027, the Department’s assessment is that limiting the funding in this way will not necessarily translate into negative impacts on children and young people with SEND and will not mean that we see negative equalities impacts. This is because the requirements on local authorities to secure provision to meet the needs of children and young people with SEND will remain in place, and local authorities must meet these requirements. The consequent budget pressures will therefore lead to accruing DSG deficits rather than having a negative impact on SEND provision.

And 17. We recognise that the size of deficits that some local authorities may accrue while the statutory override is in place may not be manageable with local resources alone, and will bring forward arrangements to assist with them as part of broader SEND reform plans, as explained in the Government’s provisional local government finance settlement document. Given that local authorities will continue to be protected from the adverse impact of those deficits through the so-called “statutory override”, and because we are seeking to protect school level allocations of high needs funding through the conditions of grant attached to the DSG, we do not envisage any adverse impact on those children and young people with protected characteristics, including those with disabilities. The national funding formula for schools and high needs 26-27

Of course, this assumes that the cash channelled through the Schools Block of the DSG is actually spent on SEND by schools, and accounted for as such in academy and MAT budgets. I am sure that will be the case.

Still, those special schools that see the base funding per pupil stuck at £10,000 for another year will no doubt wonder what has happened to inflation accounting.

All we can hope for is that it won’t be too long before the SEND reforms are announced. However, with consultation session running into 2026, it is difficult to see how SEND reforms and local government reorganisation won’t become mixed up together, with who knows what results. Perhaps the new arrangements announced for Surrey might give an indication. Hopefully, the fact that West Northamptonshire has the largest reduction in the High Needs Block of any upper tier authority (25%+) is due to its past history, not its present resourcing.

Solve the High Needs Block statutory override issue now

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June is the time of year when local authority Directors of Finance start thinking about the budget for the following April. HM Treasury is doing the same thing for the government but, with a Spending Review just announced, their task this summer should be much easier than usual as Ministers have already negotiated with the Chancellor. Directors of Finance have no such protection and are bound to produce a balanced budget for councillors to approve or face the prospect of having to issue a s114 notice and default, as some councils have already had to do in recent years.

It was very surprising not to see an announcement in the recent Spending Review about the statutory override many upper tier councils are carrying on their balance sheets,

The statutory override on council balance sheets is a result of overspends on council’s High Needs Block spending that finances the pupils and young adults with special educational needs in their local area. (SEND)

There are suggestions that a significant number of upper tier authorities with be unable to present a balanced budget for 2026/27 to councillors next February for approval unless something is done about the present statutory override that currently ends in March 2026. If nothing else is put in place, some councils will not be able to present a balanced budget and hence will default.

The simple answer would be to extend the override until March 2027 to see what the White Paper on SEND, now promised for the autumn, will bring. That move just buys time for a longer-term solution.

I wonder whether the DfE thought local government re-organisation might be a way of dealing with the deficit when new councils were being formed. After the results of May’s elections, I cannot see the present government wanting to push ahead with reorganising councils and creating new elected Mayors if such a move were to hand more victories to their opponents, and notably to the Reform Party. If reorganisation grinds to a halt that route out is no longer available for solving the issue of the override.

Another alternative is to switch the 2% precept on Council Tax from adult social services to SEND and let the NHS take the strain on funding for the mostly elderly residents currently being paid for out of the local government funding 2% precept. Such a move would not be popular but could be possible. As it wasn’t in the Spending Review it seems unlikely.

The DfE could rearrange their spending and transfer the consequences of falling pupil numbers from the Schools Block to increase the High Needs Block and do the same for the Early Years funding to keep it constant on a per child basis but recognise fewer children means less total spending. Such a move would affect funding for schools and early years setting with falling rolls.

Do nothing and councillors in Parties running councils will return from their summer breaks to be confronted with a list of serious reductions in services and personnel that might be needed in 2026. Such reductions won’t be efficiency gains, but unacceptable cuts on the level of a fire sale.

Solving the problem of the statutory override between now and the parliamentary recess for the summer should be the number one priority for all involved with education and local government. Not to do so would have consequences that are unthinkable.

The situation regarding the statutory override should not have reached the present position. In my view, it would be a gigantic failure of political will if it is not solved now.