The deficit, revealed in a report to last Thursday’s (March 7) meeting of the family and children’s services committee, has increased by more than £500,000 from what was being forecast back in September.
This is despite an additional £3million in the 2018-19 budget, over and above the £2.5million added in the previous financial year. Further growth of £1.2million has been approved for 2019-20 ‘as the existing pressures look set to continue’.
The finance and performance report says the overspend is ‘largely due to the continuing cost pressures around external residential placements, specialguardianship orders and the use of supported accommodation for care leavers’.
It adds that while the total number of children in care has dropped, ‘there remains a cohort of children and young people with complex needs who require high-cost and specialist residential placements’.
The relatively high number of out-of-county residential placements, which is certainly not unique to Northumberland and is of national concern, is partly linked to a shortage of special-school spaces and this is being addressed to some extent through the expansions at Hexham Priory and Ashdale, an Ashington-based satellite of The Dales in Blyth.
There are also plans for the council to develop additional in-county residential homes, however, they are unlikely to be ready before 2020-21.
Meanwhile, the Dedicated Schools Grant (DSG), the lump sum of revenue funding provided by the Government, is facing a year-end overspend of around £1.3million.
The DSG had carried forward a deficit of £2million from 2017-18 and ‘continues to face a significant challenge to balance the budget by 2020-21′ when the Government’s new National Funding Formula is due to be implemented in full.
Within the DSG, there was a transfer of £1.8million from the main schools block to the high-needs block this year, which will contribute to reducing the deficit.
However, the additional special-school places mentioned above have also increased costs in the short term, although they should reduce the longer-term demand for more costly places at independent special schools.
The report explains that the most significant pressure on the DSG budget has been the demand for SEN top-ups – extra funding from the high-needs block to meet pupils’ special educational needs.
Another one per cent transfer (around £1.7million) from the main schools block to the high-needs block has been agreed for 2019-20.
The education and skills service budget is forecasting a £173,000 underspend this year, having received growth of £932,000 towards the rising demand for SEN transport, which continues to increase in line with the pressure for places.
A review of all budgets, statutory responsibilities and staffing structures across the education and skills division is being carried out, the report adds.
Ben O'Connell, Local Democracy Reporting Service