Schools Finance Group: notes of meeting held on 9 January 2026

Item 2. DSG monitoring – month 8

• Government have extended the statutory override until end of 2027/28.  Details are yet to be confirmed in the context of expected national SEND reforms and potential for HNB deficits being absorbed by Central Government from 2028/29.
• DfE have reviewed the national Free School programme and are consulting with the LA on a renewed commitment to provide the new Cranbrook special school or to fund delivery of the proposed 70 specialist places in another way.  This is being considered in the context of Devon sufficiency planning, mindful that delivery of a new special school could take several years to complete, and national SEND Reforms.

Item 4. Bromcom / Unit 4 and Maintained school audits

• Schools continue to be encouraged to contact either ScoMIS or their education finance consultant if there are any ongoing concerns.
• Schools previously flagged as not engaging in the audit process will be followed up through the Schools Support Panel process, overseen by Alice McShane. SFG welcomed this increased oversight.

Item 5. EHCP Banding Review

• Devon’s current funding approach does not mirror the regional or national profile, resulting in inconsistency across Devon.
• The new framework will introduce a graduated, needs-led structure providing a clearer picture of how SEN need presents in practice, focusing on new assessments and phases transfer.
• The framework is intended to ensure that top up funding will more accurately reflect the actual cost of meeting need in a mainstream school, therefore enabling learners to be educated in their local school, resourced appropriately.

Item 6. Growth Fund Review

• Following discussion, SFG resolved not to review the Growth Fund policy in respect of ghost funding bulge classes.  Growth funding is allocated for the first year of expansion ahead of census numbers driving per pupil funding going forward.  Governing Bodies are expected to structure the delivery of education within the funding envelope available.

Attendance

DCC

Simon Niles (Chair) – Head of Strategy & Central Operations (Inclusion & Learning), Adrian Fox – Head Accountant (Inclusion & Learning), Karlien Bond – Senior Accountant (Inclusion & learning), Heidi Watson-Jones – Executive Assistant Inclusion & Learning

Devon Schools Leadership Services

Jamie Stone – Denbury Primary, Christopher Tribble – Honiton Primary, Paul Walker – First Federation Trust, Rob Gammon – The King’s School, Rachel Harper – South Molton Community College

DAG

Alex Walmsley – Secondary Governors, Adrian Hines – Primary Governors

Special Schools

Sarah Pickering – Mill Water School,

Apologies

Faith Butler – Special School Governors, Simon Winward – Southbrook Special School

1. Minutes of previous meeting – 5 November 2025

• Simon Niles reiterated a commitment to circulating reports in good time and apologised papers were late in part due to timeframes being tight in the new year.
• Positive feedback was received about the quality of communications with schools around maintained school audit schedule for the Spring term.
• Confirmed that a separate March DEF agenda will cover the locality offer and service delivery and engagement with schools to be presented by EQI Locality Leads. 
• All actions complete or in hand. Minutes agreed as an accurate record

2. DSG Monitoring – month 8

• DSG forecasting overspend of £61.6m, a net in year overspend of £17.6m over budgeted position.
• Government have extended the statutory override until end of 2027/28.  Details are yet to be confirmed in the context of expected national SEND reforms as well as proposals for the HNB costs to be absorbed by Central Govt 2028-29
• SFG acknowledged again the significant volatility around the high needs budget and difficulties in accurate budget projection in a demand-led area.
• SFG considered the position around the proposed new Cranbrook Special School.  DfE have reviewed the national Free School programme and are consulting with the LA on a renewed commitment to provide the new school or to fund delivery of the proposed 70 specialist places in another way.  This is being considered in the context of Devon sufficiency planning, mindful that delivery of a new special school could take several years to complete.
• SFG felt that further investment in special school estate would be a valuable investment of time and resource for long term benefit and future proof against future changes in policy and direction.
• SFG members expressed concern at the ongoing increase in the DSG deficit position. DCC confirmed that delivering SEND Transformation and financial sustainability were aligned.

3. Financial Planning 2026/27

• £580.1m Schools Block settlement has been announced.  A reduction of 1,200 pupil numbers has impacted on the amount coming into Devon.  Mindful that this, alongside increasing EHCP numbers is having a significant impact on schools.
• Devon remains £3.8m below a fully funded national funding formula model.  As a result, and in line with consultation, the AWPU factor has been reduced by 1.13% to remain in line with the funding envelope.
• SFG considered whether it would be appropriate to review the funding calculator currently available to schools to more accurately support budget planning.
• Noted non-domestic rates payments will continue to be made by schools and not through a direct centralised arrangement.
• Noted that approximately £5m additional funding has been channelled to school budgets as a result of the automated Free School Meals process.
• Impact of Local Government Reorganisation and the national position on the Safety Valve SEND deficit management (statutory override) was discussed in the context of the increasing deficit.  Understand that the government may propose to cover 60-80% of the accumulated debt with local authorities able to borrow to cover the balance.
• Drive continues within Devon to reduce costs, however now moving towards a position where budget projections reflect a more accurate position rather than strictly adherence to the Safety Valve projections.
• In response to SFG concerns around the effectiveness of the SEND Transformation Programme, it was noted that the Programme has recently been reviewed and data shows that progress is beginning to be demonstrated in terms of EHCPs and outcomes for children and families.  Acknowledged that previous project plans had been aspirational, however the success of the Transformation programme will drive financial improvements within the system.
• DfE suspended High Needs National Funding Formula and will be using 2025/26 position to calculate 2026/27 High Needs Block allocation of £134m (before recoupment).
• Proposed high needs service demand, including growth has been estimated at £199.3m.  SFG welcomed confirmation that Senior Leaders have confirmed the view that budget projection in line with the Safety Valve submission requires review and proposed management action will be reviewed to provide a more prudent target.
• SFG members acknowledged significant spend on Independent sector.  AF confirmed that a weekly panel scrutinises decision making on all high cost high needs provision spend.  Commissioning strategy development includes review of other local authority approaches.

• Early Years
• All increased Early Years funding allocation will be passported directly to providers.  This will be notified to providers by end February.
• SFG endorsed the increased rates including provider hourly rates, EY pupil premium and disability access funding.
• January Cabinet will consider Early Years Sufficiency ACTION – HWJ: Cabinet report to be circulated when available.
• Noted that inclusion funding is ringfenced separately and the application process is complex and not fully supporting effective support of children with additional needs.
• Noted that significant proportion of funding into settings is linked to eligibility grant which can cause a lag in identifying spaces available to parents trying to take up their eligibility.  SC confirmed that providers will be consulted with on reviews of the process on a locality basis.

ACTION

• HWJ to circulate January Cabinet report on EY sufficiency when available.
• Post meeting note: Cabinet report available from p.155 at: (Public Pack)Agenda Document for Cabinet, 14/01/2026 10:30

4. Bromcom / Unit 4 and Maintained school audit process

• Bromcom/Unit 4
• Noted intention to move to new coding structure from April 26, however delays have been encountered with testing not yet complete.
• ScoMIS currently working through findings of the testing and are confident that any changes required will be implemented within a reasonable timeframe.
• Work on the reporting tool development is continuing to timescales.
• Schools continue to be encouraged to contact either ScoMIS or their education finance consultant if there are any ongoing concerns.
• Maintained School Audits
• SFG expressed concern around planned pause in maintained audits for Spring term.  Audits scheduled for spring will be added to the 26/27 schedule with additional audit capacity identified to achieve this.
• Noted risk around the impact on gaining a view of school position, particularly where schools are refusing to engage in the process due to complexities around introduction of Bromcom and Unit4.
• DAP looking at ways to simplify the audit process, including Audit running reports themselves and reducing burden on schools to provide information, particularly for federations.
• Federation audits are being offered as a face to face process.  SFG fed back that a face to face option is being welcomed by schools.
• At the last meeting it was discussed that an audit view would be sought to establish the impact of the introduction of Bromcom and Unit4 – SFG had concerns that a pause in the programme will delay gaining that insight.
• SN confirmed that schools previously flagged as not engaging in the audit process will be followed up through the Schools Support Panel process, overseen by Alice McShane.

5. EHCP Banding Framework

• SFG received a presentation explaining the review of the model for top up funding in Devon.  Schools, health and parents have worked with DCC and People Too in developing the framework.
• It was clear that a more transparent and consistent approach to allocating funding was required, providing clarity on how funding is allocated to address a full range of children’s needs. 
• Devon’s current funding approach does not mirror the regional or national profile.
• There will be significant shift in how SEN need is measured for funding purposes; rather than being measured against description of provision in the EHCP, the new framework will measure need directly using ‘domain-based’ descriptors focusing on a range of factors.
• The new framework will introduce a graduated, needs-led structure providing a clearer picture of how SEN need presents in practice.
• A phased implementation is proposed and will start with  new EHCP assessments in the first instance.  All children’s provision will be banded, however if the child is placed at a special school, the funding allocation will remain unchanged initially.
• Full implementation will follow planned alongside phase transfers and the work with special schools.
• The framework is intended to ensure that top up funding will more accurately reflect the actual cost of meeting need in a mainstream school, therefore enabling learners to be educated in their local school, resourced appropriately.
• A more graduated range of banding will enable earlier intervention, with a clearer funding pathway where escalation of need is identified.
• Noted that in other local authorities a banded funding mechanism is the usual approach.
• SFG considered that a potential  increase in expenditure through a banded approach in the new financial year will not be matched immediately savings in the independent sector.  SEND operations and commissioning colleagues are considering how the framework implementation can be managed effectively.
• Noted concerns around the costs to mainstream schools of delivering specialist intervention with challenges around capacity and availability of specialist input.
• SFG acknowledged that recognition of an uplift in TA costs to accurately reflect current costs will quickly produce a positive impact.
• Noted that the 73 cases considered in developing the model were chosen to reflect the spread and proportion of levels of need in Devon.
• Check and Challenge sessions are scheduled and school participation in these discussions is welcomed.
• SFG requested that there is ongoing input from specialist providers alongside other school and LA colleagues and professionals.

6. Growth Fund Review

• In areas of high housing growth, schools have been asked by the LA to establish additional classes, with initial funding ceasing once the census reflects actual pupil numbers and funding is received in the following year.
• Requests have been received from a Trust for the additional classes to continue to be funded through the duration of the phase of education i.e. reception to y6.
• Noted that SFG established a Growth funding formula to provide initial support to cover the education of the existing pupils, but ongoing ghost funding has not traditionally been supported.
• The Growth fund has not historically undertaken to outline how the school would structure to accommodate the additional learners on roll nor ghost fund places year on year.
• Noted the complexities around the expansion of new communities are understood.  However, the responsibility for agreeing the working structure of the school remains with the Governing Body, with options available including operating mixed year group classes to manage the situation within the funding envelope.
• SFG consensus was that the group were not minded to change the methodology of the Growth Fund, but agreed to review the funding levels of exceptional growth allocations. ACTION: Karen Worthington
• Disapplication- varying pupil numbers
• SFG noted that a disapplication request will be considered at DEF relating to use of the Growth Fund where pupil numbers vary in new and growing schools outside of the parameters of school organisation or planned admission numbers.
• This will become an annual request to the DfE. 
• ACTION: KB to circulate a briefing note to SFG members to outline the request to DEF.

Action

• KB to circulate a briefing note to SFG members to outline the request to DEF.
• KW to review funding levels of exceptional growth allocations

6. Any Other Business

Funding Calculator

• Schools Funding Calculator to be refreshed following the December funding settlement, replacing the version currently available online.

Feedback

• SFG members were encouraged to share any feedback on the effective running or otherwise of the group
• Agenda items to be requested from the group ahead of the next meeting.

Items for DEF on 21 January 2026

• DSG month 8
• Budget planning
• Disapplication request

Future meeting dates

• Wednesday 4 March 2026 (09.15 – 12.30 – Teams)
• Wednesday 3 June 2026 (09.15 – 12.30 – Teams)
• Wed 15 July 2026 – Consultation Working Group (09.30 – 12.30 – County Hall)
• Wednesday 9 September 2026  (09.15 – 12.30 – Teams followed by Consultation Working Group)
• Wednesday 4 November 2026  (09.15 – 12.30 – Face to face at County Hall)
• Friday 9 January 2027  (09.15 – 12.30 – Teams)
• Wednesday 3 March 2027  (09.15 – 12.30 – Teams)