Agenda item

This report provides some important updates regarding the Dedicated Schools Grant (DSG) Deficit Management Plan which has been in place since 2019/20. The management plan had proved successful however there is a level of risks from increasing numbers of Children and Young People with complex Special Education Needs.

This report focuses on the overall performance of the DSG Deficit Management plan against key qualitative and quantitative performance metrics for the 2022/23 financial year as well as the outturn forecast as at period 2 of this financial year.

The Audit and Governance Committee is asked to note:

a)        The key performance targets set under the DfE Safety Valve agreement.

b)       The overall performance of the Deficit Recovery Plan against the target and challenges and risks of delivery.

c)        The impact on the accounting treatment of the DSG deficit as provided for in the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003/3146, as amended by the Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2020 and the Local Authorities (Capital Finance and Accounting) (England) (Amendment) (No. 2) Regulations 2022.

Shelley Davies, Director of Education introduced the report to the committee and explained the expectation on local authorities setting a deficit budget in relation to the dedicated schools grant to have a management plan in place, to set out the pay down of the cumulative deficit and reduce in-year spend. Croydon’s overspend had been reduced from £5.4 million to £2.05 million over the past two years. Croydon’s position as part of the safety valve programme required liaison with the Department for Education (DfE) and signing of a safety valve agreement which outlined how the council would reduce its in year overspend to zero and subsequently receive grant funding from central government over 3 years to pay off the culminative overspend. Croydon had received the first two tranches of payment and was working to meet the Key Performance Indicators (KPIs). Officers assured the committee the council was monitoring against the KPIs regularly and noted the balance of focussing both on finance and ensuring it was meeting the needs of children and young people with Special Educational Needs and Disabilities (SEND).

Charles Quaye, Principal Accountant highlighted the success within the service of meeting the non-financial targets and noted the good performance of the deficit management plan. Last year’s balance had been £15.384 million and this was expected to be £12.749 million by the end of this financial year. By 2026/27 a surplus was expected.

The Committee advised it was pleased to see the progress being made and queried whether the safety valve agreement was particular to Croydon. Officers advised a number of local authorities were part of the programme, Croydon did not have the highest deficit level in relation to its population. All safety valve agreements were bespoke and contextual to individual local authorities. The main basis for savings in Croydon was through educating children locally by ensuring enough in-borough provision was available, including post-16 years and post-19 years.

The Committee raised concerns about how unforeseen expenditure on capital or other issues would be mitigated.  Officers advised any capital expenditure sat elsewhere in the budget and SEND provision was ringfenced. 

The Committee queried how SEND provision for children in mainstream school settings was being managed to ensure their needs were met. Officers noted the importance of this issue and explained Croydon’s implementation of Croydon Locality SEND Support (CLSS). CLSS provided specific funding for mainstream schools to provide early intervention support for children, particularly during transition from nursery to reception. This did not impact Education Health and Care Plan (EHCP) assessments which were a statutory requirement and ongoing. The CLSS initiative was for early intervention to provide support when needed more quickly. It had started in 2 locations and was now rolled out across borough, and the provision was widening to include maintained nursery classes. Implementation and areas for improvement were being monitored and the council was working in partnership with schools and encouraging peer to peer support between schools.  

The Committee asked how the services were evaluated as offering best value for money for Croydon residents, and, once in place, how the provision was reviewed during a child’s education. Officers advised the council was continuously monitoring progress against the safety valve agreement plan and reporting to the Department of Education against the KPIs. Strong internal governance was in place for SEND, overseen by the SEND Board which was chaired by the Director of Children’s Services with membership from families, Croydon Active Voices, Headteachers and Health and Care colleagues. The SEND Board set the strategic direction and provided challenge to safety valve KPI reporting and the internal dashboard reporting. There was also a SEND forum and delivery groups. The importance of families and children and young people’s voices being heard was noted. 

The Committee requested clarification on the requirement of increased capacity cited in the report. Officers advised whilst there were children known to the authority, it was not possible to predict, for example, children who would come into the borough or receive a SEND diagnosis later. There was a balance required to predict these changes in demand to ensure the support needed was made available and this risk was always highted to the DfE. There was budget contingency set aside for unexpected cases to mitigate this. 

The Committee asked if the deficit recovery funding was taken from the general fund. Officers advised the DfE safety valve grant funding was paying off the cumulative deficit and the in-year overspend reductions were achieved through Croydon’s strategic changes to provision set out in its strategy, including the increases to in-borough and post-16 SEND provision.

The Committee RESOLVED to: note

a)     The key performance targets set under the DfE Safety Valve agreement.

b)    The overall performance of the Deficit Recovery Plan against the target and challenges and risks of delivery.

c)    The impact on the accounting treatment of the DSG deficit as provided for in the Local Authorities (Capital Finance and Accounting) (England) Regulations 2003/3146, as amended by the Local Authorities (Capital Finance and Accounting) (England) (Amendment) Regulations 2020 and the Local Authorities (Capital Finance and Accounting) (England) (Amendment) (No. 2) Regulations 2022.