The 2024-25 schools budget is forecast to be in deficit by £18.1 million, an increase of £1 million from a previous report in January.
East Riding Council is grappling with a substantial deficit in its schools budget, primarily due to insufficient funding to support education services for pupils with high needs.
The deficit is largely attributed to inadequate funding from the Department for Education (DfE) for the high needs block.
Georgina Bristow, Corporate Finance Manager for the East Riding of Yorkshire Council, says that while the DfE has awarded an increase in the high needs funding for the next financial year it wont be enough to keep pace with increasing costs.
The Department for Education has confirmed an increase in the dedicated schools grant, which includes an additional £3.5 million for the East Riding’s high needs block. However, this increase is considered significantly below the amount of funding needed just to maintain the current levels of expenditure
The cumulative deficit on the dedicated schools grant reserve is forecast to climb to just over £38 million by the end of this financial year. Although the schools budget is intended to be ring-fenced, Georgina Bristow says this substantial deficit reserve balance is placing a considerable burden on the council’s cash balances and is costing the authority £1.5m a year in lost interest payments.
The DfE is overseeing this deficit balance through the council’s deficit management plan, which includes agreed measures to manage and clear the deficit going forward. This oversight is part of the DfE’s Delivering Better Value programme. The council has received £1 million in funding through this programme to help mitigate the growth of the deficit. These funds are being used for initiatives such as guidance and training for schools in ‘nurture’ provisions and trauma-informed practice, as well as funding an additional SEN officer to review EHCP banding levels. These measures are currently expected to begin helping mitigate the deficit from the 2025-26 financial year onwards.
The 2024-25 Schools Budget forecast also projects a deficit of £3.1 million across individual schools. Notably, 83 of the 104 maintained schools are forecasting an in-year deficit for this financial year. While 61 of these schools have sufficient reserves to cover this deficit, 22 schools are forecasting to be in deficit with insufficient reserves.
The council is actively engaging with schools to provide support and help them return to a balanced budget position. Meetings have taken place and are scheduled for the Spring and Summer terms with representatives from the Children, Families & Schools directorate, People Services, and Finance. The council says that this ongoing engagement has shown positive impact, with some schools moving from a deficit to a surplus position.
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