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Northamptonshire schools suffer funding loss after government error

Funding for Northamptonshire schools will be roughly £5.6m worse off than expected after significant technical errors were made by the Department of Education (DfE) earlier this year.

A report sent to both West and North Northamptonshire Councils in early October revealed that they would respectively receive £3m and £2.6m less in Dedicated School Grant (DSG) funding for mainstream schools. This was due to a technical error processing pupil numbers and the current level of funding is now at the correct level.

This comes after both local authorities have also forecast overspends for the 2023-24 year, with West Northants operating on a projected £1.9m overspend and North Northants looking at a forecast £4.9m overspend in the high needs block. A large contributor is the increasing demand for SEND provision across the county, incurring higher costs.

The DSG is a specific grant which is in a separate ring-fenced account to the general fund and is designed for community schools. The allocation of the budget is reported to a council Schools Forum where heads, governors and officials meet.

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West Northants Council (WNC), who discussed the budget updates at a Schools Forum meeting on October 18, said that the average secondary school would be £57,970 worse off, and the average primary would be £12,420 down than the original July estimates – reduced by £55 and £45 per pupil respectively.

Emily Cooledge, a finance business partner at WNC, said at the forum panel: “Without either radical reform in funding, or some kind of writing off of those high needs block deficits, it’s obviously going to leave the council facing the requirement to issue Section 114 [bankruptcy] notices if they’ve got huge DSG deficits.”

A Section 114 notice is only issued when an authority believes that it won’t be able to meet its expenditure commitments. Spending controls are then put in place on everything other than required statutory services.

Currently, an override is in place to support local authorities as SEND deficits are estimated to be over £2 billion nationally. This means that any DSG deficits won’t be included in councils’ main revenue budgets. However, this will end in 2026.

Six out of the 11 neighbouring East Midlands authorities also have DSG deficits ranging from £4 million to £30 million according to WNC. Schools block funding in West Northants will rise by 1.9 per cent, compared to the previous 2.7 per cent figure given by the DfE. That would amount to a £6.9m increase in the schools budget.

Paul Wheeler, chair of WNC’s Schools Forum, said that the overall DSG increase will “almost certainly be out-stripped by any cost increases” due to “inflationary pressures”, and that the funding blunder by DfE had led to a “disappointing conclusion”.

North Northamptonshire Council (NNC) is in a similar position to its counterpart, with their predicted schools block increase dropping from £8m to £5.4m for next year. The average increase in funding per pupil is also 1.9 per cent for NNC schools.

The minimum spend per pupil levels in 2024-25 will be set at £4,610 per pupil for primary schools and £5,995 per pupil for secondary schools. It is proposed that the council will transfer a further 0.5 per cent of the schools block funding to the high-needs block, to tackle the projected £4.9m deficit in that sector.

A spokesperson for NNC said: “Nationally, there are funding pressures on services that support the education of children with additional needs. Significant work has already been undertaken to help mitigate these pressures. The mitigations that are available may have up-front costs with benefits subsequently being realised over the course of a number of years. “

These include the creation of additional SEND places and units, investment in the Education, Health and Care Plan (EHCP) team, an outreach service, and the development of an early years SEND provision.

The council says that “identifying and meeting the needs” of young people with SEND at the “earliest opportunity” remains their “central focus”.

In a letter sent to the Education Select Committee on October 6, DfE Permanent Secretary Susan Acland-Hood revealed the mistake in calculations.

She said: “I would want to express my sincere apologies that this error has occurred, and reassure you that rigorous measures are being put in place to ensure that it will not be repeated.”

A formal review of the quality assurance process surrounding the National Funding Formula calculations will be conducted with independent scrutiny, at the request of the Secretary of State.

NNC is set to discuss the corrections to the mainstream schools DSG funds and other matters at an online Schools Forum next week, on November 2.

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