Councils have been given ministerial approval to seize more than £82 million funding from their mainstream schools to prop up widening SEND deficits.
The approval is thought to be for the highest amount ever and comes despite many leaders refusing to back the raid.
Schools in one area, South Gloucestershire, said it left them contemplating “potentially shocking” cuts – such as breaching class sizes and appointing apprentices, instead of qualified teachers.
Hillingdon schools said planned cuts would have amounted to £50,000 each – the equivalent of employing a teacher.
Meanwhile in Essex, a leader said the “devastating” raid would result in inclusion jobs and strategies being cut.
“It is a textbook case of robbing Peter to pay Paul – and everybody loses out,” said Pepe Di’Iasio, general secretary of the Association of School and College Leaders.
“The government must write off local authority high needs deficits, otherwise we’ll never get out of this cycle. Beyond that, urgent reform is needed to create a more sustainable system.”
Councils must get approval from the Department for Education if they want to transfer more than 0.5 per cent from their core schools budget to their high-needs block, or up to 0.5 per cent without schools forum approval.
Freedom of information data shows 23 councils requested to “top-slice” funding for 2024-25. Just two were refused – despite nearly half being opposed by school forums.
Last year, 23 councils were given approval to slice £67 million. In 2020-21, just three councils were granted no more than £17 million.
Reducing private SEND school reliance
Kent County Council was given the green light to slice £16.5 million, the most by any council.
Norfolk was allowed to plunder the highest percentage of its core schools budget at nearly 1.5 per cent, totalling £9.7 million.
The government estimates that councils will have high needs deficits totalling nearly £5 billion by 2026.
Currently an accounting override allows the deficits to sit off balance sheets, but this is due to end next year, with more than half of councils warning of insolvency.
Many councils said the cash would be used to fund early intervention work, documents show.
Devon council said funding early intervention would “reduce escalation to high-cost statutory processes” of pupils obtaining education, health and care plans (EHCPs). The council will slice 0.5 per cent from its schools’ budgets, totalling nearly £3 million.
Barnsley, Cambridgeshire, Hillingdon and Merton all argued that the funding would help set up new state SEND provision and reduce their expenditure on costly private schools.
Cambridgeshire said its “dependency” on private provision led to “unsustainable pressures”.
Hillingdon will use the cash to provide “exceptional funding” to “highly inclusive” schools with above-average levels of EHCPs.
Safety valve failure
Fifteen of the 23 councils that requested fund transfers are part of the government’s safety valve scheme – where those with the largest deficits get bailouts in exchange for severe cost-cutting.
But some councils said they had no choice but to raid school budgets further as bailouts were not enough.
Cambridgeshire council told the government “all savings that can be practically achieved” had been made, but they were “still see[ing] demand increasing above funding”.
North Tyneside council said it would not “deliver” on its cost-cutting forecast under its safety valve deal unless it top-sliced 0.5 per cent from its mainstream schools.
In some cases, multi-year transfers were agreed as part of councils’ safety valve agreements.
Bracknell Forest has a five-year plan to top slice its schools. The council’s high needs deficit is currently £18 million, equivalent to 70 per cent of its year high needs income.
That deficit was projected to increase to £47 million in five years – more than 150 per cent of income.
Kent’s agreement to move 1.2 per cent will run until 2028, “or until such time that we achieve an in-year break-even position”. The council’s deficit for next year is £81 million.
Essex, one of five councils not on a government SEND spending intervention scheme, will top-slice 1 per cent – £12.5 million – from its mainstream schools.
Leaders were warned at a schools forum to “think carefully” about the decision to “protect ourselves as schools … to ensure we maintain control rather than being forced into what we should do [by falling into government intervention]”.
“There are some schools with no balances at all, but within the current funding structure there is nothing anyone can do about this,” the forum heard.
But Rob Williams, senior policy advisor at school leaders’ union NAHT, said “core school budgets are already under considerable pressure, and moving money around in this way is simply not sustainable”.
Top-slice more, DfE tells councils
Nonetheless, the Department for Education has asked safety valve councils to cut more.
Officials questioned North Somerset council’s decision to transfer “only” 0.5 per cent in 2023-24. The council ended up agreeing to 1 per cent.
And officials “suggested” that South Gloucestershire increase its transfer this year from £2.2 million to £2.6 million. The council’s schools forum agreed only to the lower amount.
Last year, Schools Week revealed that councils had been given government approval to circumvent laws requiring minimum funding levels in schools so they could divert cash.
The DfE has allowed Kent to reduce its minimum per-pupil funding again, by 0.9 per cent for the upcoming year. In Bournemouth, the government agreed to reducing the minimum limit by 1 per cent. North Tyneside is also now breaking minimum funding levels.
Caroline Derbyshire, CEO of Saffron Academy Trust in Essex, which is top-slicing 1 per cent, said wider transfers could put “a number of schools and trusts into a place where they are no longer going concerns next year. It’s that serious.”
Transfers ‘punishing everyone’
Nearly £30 million of funding was taken from budgets without schools forum approval.
In North Tyneside, 89 per cent of survey respondents did not support the council’s 0.5 per cent transfer. Some schools said the impact on their own finances would plunge them into deficit.
Hillingdon council first proposed transferring 2.5 per cent of its mainstream schools budget.
Over 90 per cent of respondents were against the plan, which amounted to roughly £50,000 per school – or the cost of one teacher.
Hillingdon submitted a request for a more modest 1.9 per cent transfer, but this was refused by the government. Instead, it agreed to a 0.5 per cent transfer of £1.5 million.
The council also discussed with the government whether it could minimise its top-slice by taking £11 million of “surplus” cash held by its schools. However, the process would have “taken too long”.
In Surrey, schools forum minutes noted that some felt the transfer was “punishing everyone”. But a low consultation response rate “might reflect a sense of inevitability about the proposal”, the minutes added.
But in Norfolk, the chair of the council’s schools forum, Martin White, said its transfer “runs counter to the logic of mainstream inclusion”.
Schools told the forum in November that resulting staff cuts meant they “could no longer meet EHCP requirements”.
‘Inclusion strategies will be cut’
South Gloucestershire’s schools forum agreed to transfer £2.2 million, but pleaded with the education secretary to recognise the financial challenges it faced.
The council ranks last in the country for mainstream school funding and said in its application that schools were “hanging on by a thread”.
“The things they are having to do to balance budgets are potentially shocking,” it said. This includes increasing class sizes above 30, recruiting apprentices instead of qualified teachers and turning off heating, “leaving children and staff cold”.
“There is nothing left to cut,” the submission said, “except the things children and staff need to learn and teach in a safe environment.”
Simon Botten, an executive headteacher in South Gloucestershire, said top-slicing cost schools on average £16,000.
Further cuts would “at best jeopardise academic progress, and at worst be dangerous”.
An Essex leader told their schools forum meeting they had to “cull a third of my support staff” last time round.
“The various strategies like inclusion that we have to operate in schools, they are strategies that will be cut,” they added. “The impact on secondary schools will be devastating and that will be passed on to our children in schools.”
‘Bold and brave action’ needed
John Winter, CEO of Weydon MAT in Surrey, said mainstream schools “have reached the end of their ability to cope with any further cuts”.
The government is working on major SEND reforms. The DfE did not respond to a request for comment.
But Williams said deficits must be written off, so councils have a “clean slate” to enact change.
Top slice councils said they were looking to find the “fairest” solution to a “very challenging financial situation”. Many said it was a temporary solution, and called on government for “urgent reforms”.
A County Councils Network spokesperson added the “financially unsustainable” SEND system meant some have no choice but to ask for transfers.
Arooj Shah, chair of the Local Government Association’s children and young people board, said that “bold and brave action” is needed in the upcoming spending review to ensure councils have the required financial stability to provide SEND support.
