Schools Finance Group: Notes of meeting held on Wednesday 4 March 2026

Item 2. DSG monitoring – month 10

• DSG projecting an in-year overspend of £17.8m.
• Number of EHCPs being issued remains below the forecast position stated in the Safety Valve plan but average cost is higher. 

Item 3. Update on Safety Valve, DfE Announcement on accrued deficit

• The Safety Valve Programme will end on 31 March 2026 the High Needs Stability Grant will cover 90% of the deficit identified at 31 March 2026. This is currently sat at £194.5m and will be released to LAs in Autumn 2026. This means that the Authority will need to contribute to the balance of £27.2m.
• Deficit statutory override remains in place until end of 2027/2028.
• The Government has announced that from 2028/29, SEND spending will be covered within the Government’s DEL budget so local authorities will not be expected to fund future SEND costs from general funds.

Item 5. Preparation for 2027/28 Schools Revenue Funding Consultation

• Timeframe agreed for collaborative planning of the autumn funding consultation process.

Attendance

DCC

Simon Niles (Chair) – Head of Strategy & Central Operations (Inclusion & Learning), Adrian Fox – Head Accountant (Inclusion & Learning), Karlien Bond – Senior Accountant (Inclusion & learning), Daniel Harris – Head of Financial Systems & Processes, 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 (part)

DAG

Alex Walmsley – Secondary Governors, Faith Butler – Special School Governors

Special Schools

Sarah Pickering – Mill Water School,

Apologies

Simon Winward – Southbrook Special School, Adrian Hines – Primary Governors

1. Minutes of previous meeting – 9 January 2926

• Simon Niles welcomed the group and encouraged all members to contribute to and support the wide range of discussions, regardless of Phase or school governance recognising the level of knowledge and experience at the meeting.
• Karen Worthington to review Growth Fund criteria for exceptional growth.
• All actions complete or in hand. Minutes agreed as an accurate record

2. DSG Monitoring – month 10

• DSG projecting an in-year overspend of £17.8m. Deficit statutory override remains in place until end of 2027/2028.
• Safety Valve programme is set to end on 31 March 2026.  Notification from Government of the 90% High Needs stability grant (leaving DCC to fund £27m).  Noted that DCC reserves have diminished significantly over recent years, and ongoing severe financial pressures linked to the high needs block remain.
• Total number of EHCPs remains below the forecast position stated in the Safety Valve.  13.5% of children with EHCPs are educated in independent settings.  Focus will remain on reducing volatility in this area.  Noted the reduction in growth of learners being placed in independent settings.
• SFG requested a discussion at the next meeting to review the high needs financial position over the last financial year to support their work in 2026/27.
• SFG considered how the impact of the Olive Academies work on inclusion will be reflected in the financial position

Actions:

• Agenda items for next meeting:
• Review of high needs financial position over 25/26 financial year
• Review of expected impact of Olive Academies’ strategic work on the high needs financial position

3. Update on Safety Valve, DfE Announcement on accrued deficit

Safety Valve

• New guidance will be issued linked to schools and SEND reform plan. From 2028/29, the DfE will become responsible for High Needs budget position, moving responsibility for SEND funding away from Local Authorities.
• No additional high needs funding is currently expected to come into the authority for 26/27, with clarity still expected from DfE around grant funding linked to high needs provision that may be passported directly to schools.

Funding Transfer to High Needs Block

• Noted that the 0.5% transfer was presented to schools during the funding consultation  in the context of supporting the Safety Valve programme.  Mindful of the end of the Safety Valve at the end of this financial year, SFG requested consideration of whether the funding could be reallocated to schools to support inclusion and SEND.  This would send a clear message that the LA has trust in schools to fully commit to inclusion, and could support relationship building linked to the work of the Olive Academies.
• A discussion at March DEF was requested.
• AF outlined that the Government agreement for the 0.5% transfer will stand for 26/27 and reminded the group that the block transfer is linked to the national funding formula – in Devon the expectation of the transfer was also built into our Safety Valve plan.
• SFG requested clear communication to schools to explain the situation, and felt that the LA relationship with schools will rely on respectful sharing of these important messages.  It was felt that communications to schools should also cover wider areas including EHCP banding and new special school development.
• The group were reminded that in spite of the recent announcement regarding the High Needs Stability Grant, the high needs structural deficit position in Devon remains, with ongoing in-year deficits expected.  SFG noted that DCC strategic leadership has robustly reviewed the expected high needs position for the coming financial year; monitoring of the reviewed budget will continue to be shared in detail with SFG – the focus of activity remains on improving outcomes for children and young people and families.
• SFG requested a discussion at next meeting to further explain the impact of the High Needs Stability Grant, use of DCC reserves, and the ongoing structural deficit position around high needs budget setting.
• It was felt that communications to schools should cover wider areas including EHCP banding and special school development.
• Noted that there will be ongoing monitoring to the DfE linked to the High Needs Stability Grant.
• The Schools White paper has outlined the intention that mainstream schools become more inclusive to meet the needs of more children with additional needs.  It was felt that this national policy shift will support Devon in placing fewer children in the independent sector.  SFG acknowledged that the number of children in maintained and academy special school places in Devon remains proportionately higher compared to other LAs and statistical neighbours.  Noted that the LA is already considering how additional support can be provided to mainstream schools to meet the needs of children with SEND through its High Needs Provision approval process.
• SFG felt that communication from the LA to schools and families about the implications and timeframes laid out in the White Paper would be beneficial.

ACTION

• Local Authority to discuss at March DEF and formally respond to SFG request that some or all of the 0.5% transfer for 2026/27 could be reissued to schools.
• Local Authority to consider how the position around the funding transfer is clearly communicated to schools – through DEF or via the School Leadership Update.
• Local Authority to consider communications to schools and families to outline the key messages and timelines within the schools White Paper. (Post meeting note: message included in Schools Leadership Update 6/3/26 from Jack Newton)
• Agenda item for next meeting: Discussion around the impact of the High Needs Stability Grant, use of DCC reserves, the ongoing structural deficit position around high needs budget setting.

4. Budget setting assumptions for 2026/27

• AF confirmed that the budget has been set with reference to data obtained through Mime during the SV preparation.
• Projections, based on averages of previous activity and spend have been referenced, however month by month fluctuations, based on individual needs of CYP coming into the system, cannot be accurately forecast.
• Local authority APT return must reflect the expected position, signed off by the s.151 officer.
• DCC is moving from a more aspirational view to focus on a realistic and prudent projection which takes into account other areas including SEND transport and all services funded by the High Needs Block.  Budget setting is subject to review and challenge from within the service and corporately.
• High Needs Block remains a high risk budget.  Following end of Safety Valve on 31/3/26, how any 2026/27 and 2027/28 deficit budgets will be addressed nationally is still unknown at this point.
• Aligning 26/27 budget monitoring with learning from 25/26 will be valuable.

5. Preparation for 2027/28 Schools Revenue Funding Consultation

• Timeframe: Proposed timeframe for the 27/28 funding consultation process was discussed and agreed.
• De-delegation offer: Mindful that communication of the offer to schools has been inconsistent over recent years.  DEF will receive a report on 18 March.  Alice McShane shared planning with the group.
• Planning has taken place in the context of increased focus around strengthening inclusion within mainstream schools, and to support schools to work together to improve the quality of provision, with reference to feedback from school leaders.
• SFG members requested that communication to schools clearly outlines the services that schools will receive as a result of the de-delegation of funding from schools’ budgets.  LA colleagues were reminded of the short timeframe over the summer term to ensure that schools feel the impact of the 26/27 offer ahead of the autumn funding consultation and decision making for the following year. 
• Should schools chose not to de-delegate, the options, particularly for school effectiveness and sustainability, would need to be reconsidered, including whether the LA could fund an offer or where support for maintained schools is available elsewhere, e.g.  MATs.
• School leaders have fed back how valued the school effectiveness offer has been, particularly in supporting the Ofsted process.  Mindful that support received is inversely proportionate to the success of the school, and it is proposed that the LA moves back into that space.  SFG members confirmed that there is clear ongoing need for support during Ofsted inspections, mindful that staff involved need to be familiar with the individual school. 
• The LA has had an initial discussion with DSLS maintained heads, and traded services are also being considered in the wider planning.  Devon must ensure that the offer is founded on service areas that schools need and want, alongside the statutory role of the local authority and Inclusion and Learning Strategy. Further consultation with maintained school leadership will be arranged.
• The group discussed how the offer could be tailored to different groupings of schools, rather than separately to individual maintained schools.  SOCA has discussed mapping formal and unofficial families of schools; capacity for support is available from across Inclusion and Learning services.
• Membership of the funding consultation working group to be clarified – agreed to include maintained special school (Simon Winward), secondary representation, and statutory AP provider (via Rob Gasson).
• Devon Education Services / Traded offer
• Traded offer for 2026/27 has now been communicated to schools
• Iain Stevens considering how best to engage schools in further developing the traded offer, e.g. through DSLS Schools Leadership Group and a survey of identified need.  DSLS Conference on 12 March would be a good conduit.

Action:

• Local Authority to communicate to schools outlining the services that will be offered as a result of the 26/27 de-delegation of funding from schools’ budgets.
• AMcS and JS to agree meetings with maintained school partners to further develop the de-delegation offer
• HWJ to confirm with DSLS and Wave, the secondary and AP representation on funding consultation working group

6. Any Other Business

• Growth Fund rates have been uplifted to reflect updated AWPU rates, backdated to 1 January 2026.  SFG acknowledged that salary increases are not yet confirmed, and agreed the new rates.
• Karen Worthington to share with SFG work on updated Growth Fund criteria when completed.

Items for DEF on 18 March 2026

• Discussion on 26/27 0.5% funding transfer to high needs block

Future meeting dates

• 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)