Cheshire East denied ‘safety valve’ cash for huge special needs debt

Like many councils, Cheshire East is in a position where the cost of SEND [special educational needs and disability] has outstripped government funding by tens of millions of pounds.

Its DSG (dedicated school grant) high needs deficit currently stands at about £90m and the council is holding this in a ‘negative reserve’, as instructed by government.

In January, Cheshire East submitted its DSG management plan to the Department for Education (DfE) in the hope of being admitted to the safety valve programme, which provides additional funding and support.

At Monday’s meeting of the children and families committee Deborah Woodcock, executive director of children’s services, told councillors: “Despite presenting and providing a high needs DSG management plan that brings us into an in-year balance within a seven-year period, we have unfortunately not yet been accepted into the safety valve programme.”

Deborah Woodcock, executive director of children's services (Image: Cheshire East Council)

She said this was because the council could not make any contribution towards reducing the overall cumulative deficit which would be increasing until 2031.

“The deficit… is greater than the budget the DFE had to allow for this programme and, at this stage, they are not able to enter into agreement with us,” she said.

Ms Woodcock told the committee despite this setback, there were some positives.

“We are beginning to see the impact and evidence of this plan working and this year are able to report a reduced number of EHCPs (education, health and care plan) that have been issued,” she said.

“Alongside that we are seeing a reduced deficit.”

Cllr George Hayes (Congleton Con) said while he welcomed the reduced numbers of EHCPs from a financial perspective, he questioned whether 'that’s right for children'.

Ms Woodcock replied: “The identified plan of action is both about reducing the pressure and financial cost to the council but also about improving outcomes for the children.

“If we were satisfied that every EHCP meant improved outcomes for every child then… I would be very concerned about that reduction, but we’re not satisfied that that is the position for every child.”

Poynton councillor Jos Saunders (Con) said: “In 2019 this council had a DSG surplus of £1.6m and in five years we’ve got a deficit of £90m.”

Cllr Jos Saunders (Image: Cheshire East Council)

She added: “I do think there has been a lack of fiscal curiosity by the administration. Our group have tried and tried to have more scrutiny on this.”

Conservative group leader Janet Clowes described the situation as ‘deeply disturbing’ saying: “Even if the mitigated position is achieved - and this council will still have to make savings of nearly a £1 billion to achieve it - a £284m deficit reserve still remains. That is not a balanced position.”

Much of Cheshire East’s spending on special needs provision goes on sending children to schools outside the borough, which also involves massive travel costs.

Cllr Carol Bulman (Image: Cheshire East Council)

Committee chair Carol Bulman (Middlewich, Lab) said: “When Cheshire County Council was divided into Cheshire East and Cheshire West, out of the existing 19 provisions for special needs, we got four of them and CWAC got the rest.

“I’m not saying that’s the only cause… but it is a stark fact.”

Macclesfield councillor Sarah Bennett-Wake (Lab) said: “I feel that not only this council, but other councils across the country, are being blamed for getting into financial difficulty when the government hasn’t given them enough money to look after those children’s needs.”

The committee voted, by seven to six, to approve the recommendations which included approving the revised DSG management plan for 2024/25 to 2030/31 and to note that officers will continue to work with government departments to find an appropriate solution.

Committee members will be updated monthly.