Special needs deficit could hit ‘record’ £160m

Complex placements and excessive agency costs contributing to overspend

Devon is set to see its special needs deficit surge beyond £160 million – a new record – as pressure mounts on the service.

A report to the council’s cabinet meeting today (8 November) shows the deficit relating to special educational needs and disabilities (SEND) is forecast to be £37 million this financial year, up more than half-a-million pounds in just two months.

This pushes the cumulative total to a predicted £163 million by next April.

The council agreed in September to cut spending in a bid to create a £10 million reserve that it could use to contribute towards the deficit.

Progress has been made, with £7 million in savings identified as achievable, and with plans ongoing to secure the remaining £3 million.

The report for councillors notes that “unlike in previous years”, the council’s finance team and its counterpart at the Devon Integrated Care Board are supporting the delivery of services “on budget within a particularly challenging environment”.

But it warns of continued hurdles.

“There are, however, emerging risks within Children and Young People’s Futures with increasing numbers of complex placements and continued pressure associated with excessive agency costs,” the report said.

“In response additional intensive work and the establishment of a cross-council placement taskforce is seeking to address this issue at pace.”
It added there had been “significant progress” in stabilising management tiers within the SEND system, with the level of interim managers reducing by 70 per cent since February.

Guidance from central government means that local authorities can hold their SEND deficits off their balance sheet, meaning any shortfall is essentially ring-fenced away from the main budget.

Devon’s Lib Dem leader, Councillor Julian Brazil (South Hams), said that many authorities are struggling with funding SEND services, but that the county is “an outlier in a bad way” in terms of its service.

“We’re surrounded by good and excellent authorities while Ofsted has rated us inadequate,” he said.

“We are failing vulnerable children, and these are the people we need to support.

“The issue hasn’t been given the time and effort it has needed.”

A spokesperson for Devon County Council acknowledged the predicted £162 million figure “could be the highest the SEND overspend has been at the end of the financial year,” adding that this had been accumulated over a number of years.

“Devon – like a number of other councils – is negotiating for extra funds with government, and we hope to have good news after Christmas,” the spokesperson said.

“The government has told all top tier councils to hold the overspend in a separate account off the main budget.

“As for the overall budget predictions, we’ve made substantial progress since the summer of 2022 when an overall overspend for 22/23 of over £40 million was predicted.

“After a cross-council exercise to reduce spending and increase income, we actually finished the year in the black.”

Devon’s children’s services were rated inadequate in 2020, and a letter from Ofsted in January this year said its visit to the county showed its leaders had “not ensured that all children who come into their care know early enough what the permanent and secure arrangements are for their lives”.

“There has not been enough progress for children in this area of practice since the full inspection three years ago,” it added.
However, it did acknowledge the “energy and strong commitment” of middle and frontline managers who were trying to maintain a level of continuity and implement an improvement plan.