Hopes for £70m-£100m bailout to tackle special needs deficit

Devon’s decisionmakers are hoping to get grants of between £70 million and £100 million to help tackle a cash shortfall for the county’s special educational needs (SEND)

The county council is to submit an application to the government’s so-called ‘safety valve’ support scheme, aimed at helping local authorities tackle SEND deficits.
Based on current projections, Devon could have built up a £162 million deficit against this service by April next year, although governments have allowed councils to keep these deficits off their balance sheet until 2026. That means the council isn’t breaking the law in spending too much money, as they are usually obliged to balance their budgets every year.
Angie Sinclair, Devon’s director of finance and public value, told the council’s audit committee this week that some authorities had received funding from the safety valve scheme, but that there was no set formula for how money is allocated.
She said the Department of Education told them in September that it had set aside about £70 million for Devon, and she thought the council’s chief executive was adamant she was going to ask for £100 million.
“That’s the sort of scale we’re talking about, but there is no agreement yet,” she said.
She added that while some safety valve deals had been done, “we don’t have an indication of how much we are likely to get yet as it is very much down to what we submit in December”, with further negotiations in January before a finalised decision in February.
As part of its application, Devon set out this year to create a £10 million safety valve reserve fund, which bolsters its application for a grant.
Asked what state the county’s finances would be in if the ability to keep SEND deficits off balance sheet was removed, Ms Sinclair said the council would still have more reserves than deficit “but that wouldn’t last for very many more years” if spending levels remained the same.
She also noted that advisers were helping it find ways to provide SEND services without adding to its deficit.
The safety valve programme began in 2021, when five councils were enrolled and £100 million of funding agreed. Nine deals totalling £300 million were agreed in 2022.
In March this year, 20 new deals were signed, totalling £586 million.
Kent County Council negotiated a £140 million deal, while Norfolk County Council received £70 million, and Torbay secured £13 million.