Question to the Ministry of Housing, Communities and Local Government:

To ask His Majesty's Government whether local authorities will be expected to pass on high needs deficits to any new unitary councils created following local government reorganisation.

In general, as with previous restructures, there is no proposal for council debt to be addressed centrally or written off as part of reorganisation. It is the Government’s expectation that any debt held by a council will be transferred to the new council. Councils remain responsible for managing their budgets, and it is standard for councils to borrow and to hold debt, which they will do in the normal course of business. Local government re-organisation does not change this and it is essential that councils continue to deliver their business-as-usual services and duties during and after local government reorganisation.

In relation to the high needs deficit, the Fair Funding Review 2.0 announced a two-year extension to the Dedicated Schools Grant Statutory Override, now due to end in March 2028. We will set out more detail on our plans to support local authorities with historic and accruing SEND deficits later in the Settlement process.

Once the Statutory Override ends in March 2028, funding for SEND deficits will be managed within the overall government DEL envelope and would not be expected to fall to local authority general funds.