SEND uncertainty prompts budget setting concerns for Devon

Fears raised at DCC

Fears have been raised about Devon County Council’s ability to start its budget-setting process amid ongoing uncertainty around its huge special needs deficit.

Many councils across the country, including Devon, were hoping for clarity from the government about what it will do about roughly £6 billion of special educational needs and disabilities (Send) deficits nationwide.

The previous government allowed councils to effectively ringfence these deficits out their annual accounts, but that permission – officially called the statutory override – ends next March unless it is extended or an alternative solution created.

What that means is a council’s Send deficit will be moved back onto its balance sheet.

In Devon’s case, at more than £130 million, it is greater than the council’s cash reserves.

Addressing the audit committee this week, the council’s finance director Angie Stewart said if no government action is taken it would put its finances at risk.

“This is not unique to Devon, but we have to deal with our own issues,” she said.

“We must be mindful of what the government is going to do with the end of the statutory override approaching.”

Chancellor Rachel Reeves did not mention Send deficits in her spending review speech, but documents released later pledged clarification in the auutmn.

Donna Manson, the council’s chief executive, said the lack of any clarity is  worrying.

“I have concerns about the ability of the council to set a budget for next year, as there are question marks on whether the Send deficit will be moved or not, and that has a significant impact on what we look at as an organisation,” she said.

“I consider this a matter or urgency as we did not hear what we expected to in the spending review.”

Committee’s chair Cllr Alan Connett (Liberal Democrat, Exminster & Haldon) expressed his frustration given the Send deficit “entirely wipes out our reserves”.

“It is the single-biggest risk to this council that has no mitigation as the government has done nothing to say whether the current arrangement carries on or what they expect us to do,” he said.

“The Safety Valve agreement does nothing to limit the demand that has to be met by the council.”

Devon secured £95 million from the Safety Valve rescue scheme run by the previous government, with funding paid over nine years.

But the current government halted new applications for such grants, meaning the future of existing agreements is unclear.

Cllr Connett agreed to hold an extraordinary meeting next month to discuss the issue in more detail, after worries from some councillors that it would be too long to wait until the next scheduled meeting in September.

Deputy chair Cllr Paul Hayward (Independent, Axminster) said: “I feel a little bit ill at ease given the chief executive’s point, because if the audit committee considers this in September, we will be well into budget preparations [for the 26/27 financial year], and waiting until then could cause problems.

“The item is so significant to this authority that I would be happier with an extraordinary meeting when the government provides clarity [to the council].”