Agenda item

The Chair referred to the Q2 Budget Monitoring report on page 7 of the agenda pack and asked SH to lead the item. 

SH noted the build-up of the cumulative DSG deficit which is mainly attributed to overspends in the high needs block.  Over a number of years, that deficit has risen to £25.5 million; of this about £10.8 million was written off last year by the DfE, leaving the current position of £14.7m deficit. SH noted that a small deficit of £0.1m at the end of the financial year in March 2023 increased the overall deficit slightly to £14.8m, which is the starting point for the 2023-24 year. There is an understanding with the DfE that there will be further payments to help reduce the remaining deficit over the period of the Safety Valve programme. This is dependent on returning to balanced budgets and ‘living within our means’ within the DSG.

The forecast at the end of Q2 is for a surplus for the year of £0.6 million, comprised of a surplus of £0.3 million in schools, £0.2m in high needs and £0.1m on early years.  The expectation is that the Central School Services Budget block would be fully allocated. This would reduce the overall deficit to £14.2 million with further payments coming in from the DfE to reduce that.  However, although the Schools Block is showing an underspend of £300k, this is linked to the Growth Fund contingency which may be used in supporting bulge classes;  in quarter 3 that figure may reduce.

The Chair asked whether the likely DfE contribution at the end of this year was know, and what impact this would therefore have on the cumulative deficit?  SH confirmed that SBC had received two payments of around £1 million each, with a third payment expected, and that the intention is for the deficit to be cleared by the end of 2026-27.  NH noted that there are agreed staged payments agreed up to 2027, which total up to the £27m.  The overspend should be reduced to a breakeven point and then to a positive position so that no new debt is added. NH confirmed that he has asked Len Brazier of the SEND team to join the meeting for his item so he can comment further on some of the work being done in this area.  The Chair welcome LB to the meeting. 

There were no further questions or comments on this item.