EXCLUSIVE: High needs spending could 'bankrupt councils'

By Dan Peters | 13 May 2021

A senior finance director has warned that spending on high needs threatens to ‘bankrupt councils’ as local authorities queue up for a bail out.

The comments from the president of the Society of County Treasurers, Lorna Baxter, come after five councils struck deals worth at least £100m that will allow them to wipe out their massive special educational needs deficits.

Writing in this week’s The MJ, Ms Baxter, who is director of finance at Oxfordshire CC, said: ‘It is positive to see the Department for Education has agreed plans with five councils to fund their deficits, which in themselves total £100m, but what about the other 147 councils?

'What plans are there to address their issues?

'The councils where the deficits have been agreed to be written off are by no means at the extreme end of the problem scale.

'High needs has the potential to bankrupt councils.’

Since 2014 the numbers requiring an education, health and care plan (EHCP) have risen exponentially due to the increasing child population, earlier identification of need, parents challenging the system and the extension of the eligibility criteria to those aged up to 25.

President of the Association of Directors of Children’s Services, Charlotte Ramsden, warned: ‘The current very significant deficit in the high needs block is not going to go away any time soon.’

Torbay Council, which has the highest proportion of school-aged children in receipt of an EHCP in the country, has warned ministers about its rising deficit for years and recorded a historic deficit of £5.8m at the end of March.

It told the Education and Skills Funding Agency that it was unable to recover its deficit at a crunch meeting last week and is seeking to follow in the five’s footsteps by striking a bailout deal of its own.

Torbay’s assistant director of education, Rachael Williams, said: ‘We are concerned about the rising cumulative deficit position and believe that there are only minimum gains we can make as a local area in addressing the debt – both in-year and historic.

'Our concern is we know our solutions locally are limited.

'Without inward investment we will struggle to meet future demands.’

Read more from Ms Baxter here

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