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(UK) Knowsley: $43M "black hole" in high needs budget

July 12, 2024, Echo: Council facing £33m [$43M] black hole in special needs spending

NW England

Councils in England are forecasting a massive shortfall in budgets for supporting children with special educational needs
Knowsley Council is facing a £33m [$43M] black hole in funding after overspending on their schools' High Needs Budget (HNB) for two consecutive years.

At the Knowsley Schools Forum held on Thursday July 11, education experts met to discuss a range of topics relating to provision in the borough including the HNB and the dedicated schools grant (DSG). The report revealed there had been a £13.446m overspend in HNB for 2023/24 and forecast a deficit of £19.7m for 2024/25. In total, the council has forecast a HNB deficit of more than £33m by next year.


Historically, education deficits would have an impact on councils’ overall financial health.


However, due to the amount of local authorities running deficits in their education budgets, central government implemented a 'statutory override' policy in 2020. In effect, the DSG is now ring-fenced and is managed separately from the council’s core budget and has zero impact on council tax payers.


The current 'statutory override' policy is set to expire at the end of March 2026 and many councils will be hoping a new government will either extend it or come up with a more sustainable solution. One representative from Knowsley Council said: "With a change of government there may be some additional funding coming our way to reduce this deficit. We also have a recovery plan which has been submitted to the Education Schools Fund Agency (ESFA)."


The financial crises within the education budgets are evident in local authorities across the country with deficits growing exponentially since 2015 when central government extended the age range of young people who qualify for special educational needs and disability (SEND) support without covering the financial costs associated with the increased demand.


Cllr David Lonergan, Cabinet Member for Children’s Services in Knowsley Council, accepts the financial pressures within the HNB are evident within local authorities across the country with an accumulated national HNB deficit of £1.6bn [$2B]. He said: “This is being driven by the rising cost of its statutory duties in relation to children and young people with special educational needs and / or disabilities."



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