North and West Northamptonshire Councils predicting combined black hole in their schools budget of almost £40 million

A report from the County Councils Network (CCN) recently found that 26 of England’s 38 county and rural unitary authorities would be at risk of filing for bankruptcy if the multi-million deficits are placed on their budget books.

Currently, a statutory override is in place until March 2026 which allows councils to keep the massive schools funding gaps separate from their general spending.

If it is removed, some authorities have warned that they could become insolvent overnight.

Both West Northamptonshire Council (WNC) and North Northamptonshire Council (NNC) have told the Local Democracy Reporting Service (LDRS) that they are not at risk of issuing a Section 114 bankruptcy notice if the override is stopped, despite their sizeable overspends.

In the north of the county, an update on the Dedicated Schools Grant (DSG) position said the total deficit by the end of the financial year is expected to be £24.2m.

A council spokesman said that, based on current predictions, NNC would have sufficient reserves to plug the gap if it is added back onto its balance books in 2026 thanks to its ‘prudent financial planning’.

“We actively identify and mitigate potential risks, ensuring the council remains on a sound financial footing. As a result, the issuance of a Section 114 notice is not a concern for this well run authority,” they explained.

‘Line by line review of high cost SEND pupil placements’

Leader of NNC, Jason Smithers, added: “The national pressure on services to support the education of children with additional needs is well documented. Many councils are struggling to contain expenditure within the budget available to meet needs.

“The mitigation actions that are available often have front loaded costs and benefits are felt over the course of many years. Whilst funding has been increased, this has not reflected the full increase in needs that are being identified.”

At a schools forum meeting on December 12, the director of children’s services, Charisse Monero, said there had been a ‘substantive’ surge in the requests for education health and care plans (EHCPs), which has had an impact on the high needs block deficit.

She told members that the authority currently has 4,200 plans, but that it is forecast to more than double to 9,200 by 2028.

Cllr Smithers continued: “Plans have been under way to develop a multifaceted strategy to address the legacy DSG budget pressures and the cumulative deficit position.

"A DSG/ High needs block programme and plan has been constructed and is in place and will be monitored through a revised set of governance arrangements.

“This will include an Access Gateway panel to robustly assess all incoming independent sector requests as well a high-cost independent provision tracking panel to ensure systematic grip and monitoring oversight of all placement activities.

“In the interim, everything possible will be done to minimise the impact through line by line review of high cost SEND pupil placements but the significant mitigation will come once our new provision is delivered.”

Other plans include the creation of a North Northamptonshire Trauma Informed Practice team, which will include early help navigators, SEND inclusion navigators, therapeutic practitioners and training for schools, to go live from April 2025.

‘The whole thing is totally broken’

For West Northamptonshire Council, the cumulative schools deficit is expected to be at £13.8m at the end of March 2025.

The authority said it had seen a 40 per cent increase in EHCPs since 2021 and that an increase in requests is ‘likely’ to continue.

The assistant director for education, Ben Pearson, told members at a schools forum meeting last week that the DSG deficit ‘will get worse’ because of the demand coming through.

However, like its counterpart in the North, WNC said it was not in the territory of having to issue a Section 114 notice as a result of the schools budgets.

Chief executive of the authority, Anna Earnshaw, told the LDRS that their SEND improvement plan was key to mitigating rising costs.

“Once you start to get into this, because of this massive increase in SEND and EHCPs, any kind of pressure on that high needs block tends to double and double. Would it put us into bankruptcy? At this point no, but it would be a lot to write back on to the general fund if we had to do that.”

Referencing the CCN report that called for vital reforms to be implemented within the next 18 months, she said the current national funding structure is a ‘poor, expensive system that’s not doing what it needs to’.

“As the report says, the whole thing is totally broken. We’ve seen somewhere between 20 and 40 per cent more spent… and it’s growing every year, but it’s not changing outcomes for SEND children.

“We’re doing more to provide extra support for schools to include more children in mainstream, we are doing a huge amount of work with our SEND parents group and our schools around making sure we have an earlier help offer.

“The number one thing that we should be able to do is include more children in mainstream education. That is a big burden on schools if you’re not careful, so to do it we need to have a supported funded model to be able to help earlier, to bring health colleagues to school around the child.

“That’s the key for us, and then obviously, alongside that we’re doing the work around the speed of processing EHCPs and everything else.”

WNC noted in its budget papers that Government announcements have been silent on the extension of the statutory override, but suggested that it would be ‘highly unlikely’ that it wouldn’t be extended.

The County Councils Network has called on the government for vital reforms to be implemented, such as a new national framework, reforms to the tribunal system and changes to make mainstream schools more inclusive for SEND pupils to reduce the overreliance on special school placements. It has also asked for ‘immediate clarity’ on how the Treasury plans to manage councils’ high needs deficits.