Deficit permission 'no solution but will prevent collapse in next year'

SOMERSET Council has been given a stay of execution after the government ruled it could keep a spending deficit on special needs education off its books for another two years.

- DANIEL MUMBY Local democracy journalist [e-mail]

Demand for specialist education for children and young people with special educational needs and disabilities (SEND) has soared in recent years, with rising demand and climbing costs putting huge pressure on council budgets.

Demand for SEND education resources has vastly exceeded on government funding for years, with Somerset's own dedicated school grant (DSG) deficit now predicted to exceed £100m by the end of the financial year following the provision of additional funding to support Hill View School near Yeovil. The then-Conservative government introduced a DSG statutory override in 2020, allowing local authorities to keep these deficits off their balance sheet and ward off the threat of effective bankruptcy (known as a Section 114 notice).

This override was due to expire on March 31, 2026 - with Somerset Council leader Bill Revans warning MPs in March that councils up and down the country would declare effective bankruptcy “like confetti” without this override being either extended or overhauled.

The Department for Education (DfE) announced on Friday (June 21) that it would be extending the override until April 2028, with more long-term reforms expected to be announced in the autumn as part of a wider white paper on schools.

Somerset Council has welcomed the news but warned it was “not even the beginning of a solution”, with months of “uncertainty” still brewing about its finances and those of its neighbouring local authorities.