Safety valve funding agreed with Department for Education to resolve DSG deficit

Thursday 24 March: Hillingdon Council has agreed a 'safety valve' agreement with the Department for Education (DfE) to resolve a historical deficit of Hillingdon's ring-fenced Dedicated Schools Grant (DSG).

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The council, along with many other local authorities across the UK, found itself with a deficit due to the growth in demand for special educational needs (SEN) provision greatly exceeding the government funding provided over the past eight years. 

The deficit had arisen due to changes in the requirements for SEND provision from local authorities, including extending the upper age limit for support from 18 to 25, which has led to a commensurate increase in demand.  

In Hillingdon this manifested as a 90 per cent increase in the number of families requiring education health and care plans - documents which set out a child's special educational needs - over the seven-year period from 2014/15 to 2020/21.  

After extensive discussions with the DfE on Thursday 24 March the council's Cabinet ratified the safety valve agreement which will clear the cumulative deficit by 2025/26. The agreement will not impact council reserves available to support day-to-day services, will require no increase in council tax and will have no adverse impact on the council's financial resilience.   

The DfE has committed to paying the council £25 million the five years to 2025/26. Further funding will come from the DfE increasing the formula funding being given to local government for SEN places as part of the spending review and, as a safety valve authority, the council will also be able to access special top-up funding for the delivery of additional in-borough school places.  

Cllr Martin Goddard, Hillingdon Council's Cabinet Member for Finance, said: "This council has a strong and proud record of sound financial management.

"Like many other councils we have had to address and resolve a difficult position due to the demand for SEN provision greatly exceeding available funding. However, this financial settlement with the DfE is a welcome step that will resolve the position and in conjunction with the associated extra measures will enable us to continue to meet the needs of SEND students in the borough."   

Discussions over a safety valve agreement began with the DfE in October 2021. The agreement references the council's DSG Recovery Plan Programme, which was already being developed prior to the safety valve discussions but has since been finalised and is being implemented. In signing the agreement, the DfE has recognised the council's continuing work and progress in this area. 

The recovery plan has been developed around an expansion of in-borough SEND school places and investment in early intervention measures, such as supporting mainstream schools to enable greater inclusion and targeted intervention for children aged 0-5.  

Page last updated: 24 Mar 2022