Dedicated Schools Grant

Debate between Catherine McKinnell and Tom Gordon

Tuesday 6th May 2025 Westminster Hall

[Catherine McKinnell]

I think the hon. Gentleman will appreciate that I cannot get into the detail of a particular local authority area, or indeed a particular aspect of the funding. He will also appreciate that the national funding formula is fairly complex and obviously any changes to it will be very carefully considered, so that we make sure that it is allocated fairly. Nevertheless, I appreciate the issues that various hon. Members have raised today about the different challenges faced by different parts of the country, different demographics and different geographies. Obviously, all those factors will need to be taken into consideration.

Members have also touched on the issue of pay. In its written evidence to the review body, the Department proposed a 2025 pay award for teachers of 2.8%. We were clear that schools will be expected to fund that award from the overall funds they will receive next year, including the additional £2.3 billion provided in the autumn Budget. The schools’ costs technical note, which was published in March, forecast a £400 million headroom in school budgets nationally in this financial year before staff pay awards. As I said at the beginning, I recognise that individual schools will have to balance funding and costs differently, which will matter in how any staff pay award might affect their budget. We will continue to support schools as they navigate these decisions, which are in line with the asks of the rest of the public sector, too.

[Tom Gordon]

I recently met a number of schools in my constituency; part of the problem that they have in balancing the books is the ongoing lack of reasonable amounts of maintenance funding. Last year I met the Under-Secretary of State for Education, the hon. Member for Portsmouth South (Stephen Morgan), who is the Minister with responsibility for early years, to discuss this issue. Will that funding also be considered when we talk about funding allocation, because in places such as Harrogate, where we have schools that are hundreds of years old, the cost of maintaining those schools far outstrips the cost of maintaining new builds in urban areas?

[Catherine McKinnell]

I appreciate the challenge that the hon. Gentleman faces. I also appreciate that some of these capital challenges, which are obviously revenue challenges as well for some schools, are a big challenge. We have seen chronic under-investment in our school estate over many years. However, my hon. Friend the Member for Hexham (Joe Morris) and his constituents have sadly experienced that a school built only eight years ago also appears to be crumbling now. We have a significant backlog of repairs and maintenance, and support that has to be given to schools to get them up to a standard whereby they can deliver the education that we know children deserve. Obviously, we will continue to look at these issues as we navigate a difficult financial situation. We are acutely aware of the challenges that many schools face in maintaining their estate.

Fundamentally, each of our decisions is based on the determination to build a firm foundation upon which to rebuild our public services; some of that is about what we deliver and some of it is about the infrastructure. That is because we are determined that all children and young people with special educational needs and disabilities also receive the right support, so that they can succeed in their education and as they move into adult life. High needs funding will increase by £1 billion in 2025-26, which will bring the total to over £12 billion. Of that total, Gloucestershire county council is being allocated over £105 million through the high needs funding block of the dedicated schools grant, calculated using the high needs national funding formula, which is an increase of over £8 million. The high needs allocation is an 8.3% increase per head in the two to 18-year-old population compared with 2024-25. That funding is to support the ongoing costs of special educational needs and disability provision.

To be clear, we do not expect local authorities to use that increase in high needs funding to pay down historical deficits. The structure of the high needs funding formula is largely unchanged. As I said, we need to take time to consider what changes might be necessary in future years to ensure that the system is fair and directs funding to where it is needed, and supports any reforms that we want to bring forward in relation to special educational needs and disabilities.

The Government recognise the strain that the rising cost of special educational needs and disabilities provision is putting on local government, and particularly the impact on councils’ finances. The statutory override is a temporary accounting measure that separates out local authorities’ dedicated schools grant deficits from their wider financial position to help them manage their deficits, and we are working with the sector to find a way forward. We will set out plans for reforming the SEND system in more detail later this year, which will include supporting local authorities to deal with historical and accruing deficits as part of any period of transition from the current SEND system to any new system. That will also inform any decision to remove the statutory override.

[Tom Gordon]

I thank the Minister for being generous with her time. I want to press her on her point about working with local authorities. Given that some councils now under Reform control seem to be getting their instructions by diktat from their leader, the hon. Member for Clacton (Nigel Farage), is she disappointed, like I am, that no Member of the Reform party is present for this important debate?

[Catherine McKinnell]

The hon. Gentleman makes his point well.

As a Government, we are determined that local authorities will be able to deliver those high-quality services for children and young people with special educational needs and disabilities, but in a financially sustainable way. Those two elements go hand in hand to create a stronger and more prosperous future for children and families. Many hon. Members have spoken about their constituents’ experiences, and we recognise that too many families and children are not experiencing the quality of SEND services and provision that they should expect, and that the rising cost of SEND provision is putting a significant strain on both local authority and school finances.