Dudley Council is formulating plans to reduce expenditure for children with special needs following a £15 million overspend in the current financial year.
A recently published financial report, set to be discussed by the council’s cabinet on 13 August, indicates an overall improvement in the authority’s budget. However, children’s services remain a significant area of financial pressure.
The council’s Dedicated Schools Grant (DSG), which is earmarked exclusively for educational purposes, is projected to have a £12.9 million deficit in the 2025/26 financial year.
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Government funding boosts for early years provision have somewhat alleviated the overall budget deficit, primarily caused by increased spending on high needs and Special Educational Needs and Disabilities (SEND) services.
The report, authored by Audra Statham, Dudley’s interim director of resources, highlights the wider issues saying: “The financial pressures within the DSG High Needs Block reflect a national challenge facing local authorities, driven by increasing demand for SEND provision, growing complexity of need and rising placement costs. These pressures continue to place significant strain on local authority finances and reinforce the need for fundamental reform of the SEND system.”
When combined with deficits from previous years, the total shortfall in the DSG currently stands at £52.8 million. The government has pledged to cover 90% of this amount.
Ms Statham’s report also warns that without substantial reform, the DSG deficit could nearly double over the next two years, reaching approximately £94 million.
“The council is developing its Local SEND Reform Plan and Financial Recovery Plan, including detailed work to refine forecasts, identify mitigating actions and reduce future cost pressures,” the report states.
It also notes considerable uncertainty in current forecasts, with expectations that demand for Education, Health and Care Needs Assessments (EHCNAs) and Education, Health and Care Plans (EHCPs) will increase during the 2026/27 and 2027/28 financial years as SEND reforms are rolled out.
Furthermore, the existing backlog of assessments may exacerbate expenditure pressures, potentially causing costs to surpass current projections.
The council’s commitment to addressing these pressing financial challenges indicates ongoing efforts to manage and reform SEND provision amid rising demand and costs.