Agenda item

Joshua Amahwe, Head of Finance CYPS, presented a report outlining the 2024/25 performance against the approved Safety Valve Agreement (with the Department of Education) and the recovery plans in place to enable Rotherham to achieve financial sustainability and operate within its annual financial allocation over future years.

The report also highlighted the financial position of the Dedicated Schools Grant (DSG) High Needs Budget in 2024/25 and the projected accumulated deficit position over the life of the Safety Valve Agreement.

Ongoing monitoring had taken place with financial and progress update reports submitted by the Council to the DfE on a quarterly basis to both support delivery and hold accountability of the Agreement.  This support and challenge process also allowed emerging challenges to be shared and a vigorous oversight of plans to be undertaken.

Rotherham was on track in 2024/25 and had delivered against all the conditions of its ‘Safety Valve’ Agreement.  In addition, financial performance was on track against the agreed DfE plan and the Agreement.

The report submitted outlined the progress made towards meeting the key conditions in the Safety Valve Agreement as well as Phases 4 and 5 of the SEND Sufficiency Plan.

The Safety Valve Agreement recognised a Phase 5 of SEND Sufficiency the main focus of which would be to provide increased sufficiency of places and condition improvements without Rotherham’s specialist provision.

Phase 5 would cover 3 core elements i.e. SEMH growth, Newman School and Pupil Referral Unit Development and schemes were currently in development with delivery phased across the next 2 academic years.

The Local Authority would continue to update the DSG management plan as part of the Safety Valve Agreement to reflect changes in the Council’s deficit recovery plan.  Ongoing monitoring would be in place across the lifespan of the programme with quarterly submissions to the DfE on progress and any risks it faced.

The key points were:-

-        The ‘Safety Valve Agreement’ would provide Rotherham £20.5M over the 5 year period to 2025/26 based on satisfactory achievement of the conditions in the agreement

-        The DSG reserves position by the end of 2024/25 compared favourably to the assumed position in the Safey Valve Agreement.  This was mainly due to the use of other DSG balances

-        The DSG reserves position had moved from a cumulative deficit position of £12.8M at the end of 2021/22 to a cumulative deficit of £2.5M at the end of 2024/25, reflecting the impact of the Safety Value monies from the DfE and efforts made by the Council to reduce in-year deficits

-        A cumulative deficit was currently anticipated in the DSG reserves (£3.8M) in 2025/26 (last year of Safety Valve Agreement) compared to a balanced position assumed in the signed Safety Valve Agreement.  The increased deficit in 2025/26 was due to continued demand challenges facing the SEND system, inflationary pressures and increasing cost of supporting complex needs pupils in specialist provision

-        The current statutory deficit over-ride/protections would cease on 31^st March, 2028 (it had been extended by the Government for another 2 years).  This provided flexibility for the Council to carry forward the 2025/26 year end DSG reserve deficit of £3.8M

-        DfE had asked the Council to submit a DSG plan covering the next 5 years.  This would show the financial trajectory (costs and funding) beyond the Safety Valve Agreement and whether financial sustainability could be achieved in the medium term

Discussion ensued with the following issues raised:-

·        No increase had been seen in the number of young people placed outside of the Borough in 2024/25

·        Positive work with the mainstream schools to better manage permanent exclusion numbers

·        A free school opened in October 2022 which was now up to full capacity in 2024/25.  This was supporting a lot of SEND young people in Rotherham who would otherwise have been placed outside of the Borough

·        Support provision developed in mainstream schools and also work with schools through the Educational Psychologist Service and Inclusion Services in terms of supporting teachers so they could support/keep children and young people in school

·        In spite of the above, an in-year deficit of £3.7M was reported for 2024/25.  However, this could have been a lot higher if the steps/action had not been taken to mitigate that.  The High Needs budget position for Rotherham compared favourably when compared to other local authorities in England 

·        The Council continued to experience year-on-year growth in the number of pupils with Education Health Care Plans (EHCPs).  Rotherham had a higher proportion of pupils with EHCPs in both mainstream and special schools compared to national and neighbouring authority averages.  Managing the increased demand for assessments and EHCPs from parents, carers and schools was becoming increasingly challenging 

·        The Government would be publishing a SEND White Paper in the early autumn which would outline actions to improve the SEND system.  The Transformation Fund would put money into the system to support local authorities implement the changes

·        The statutory override and deficit protection had been extended to 2027/28 allowing local authorities to carry forward DSG deficits annually until then.  Rotherham was currently reviewing financial projections to better understand its future position.  This remained a significant national issue 

·        A suggestion was put forward that future reports should illustrate what the position would have been without the Safety Valve funding and actions taken.  This would show the level of savings or cost avoidance achieved by the Council in the year

·        The DSG plan covering the next 5 years, as requested by the DfE, would be completed in the next couple of months and submitted to the DfE in the next quarterly progress update in December 2025 

·        There had been a significant increase in the number of mediation cases in the last 12 months as well as a high number of appeals and disputes with carers/parents relating to assessment/SEND placement decisions 

·        The Safety Valve actions had not adversely affected the quality of provision or the support available to children and young people with SEND and their families.  This was evidenced by the outcome of the most recent Ofsted inspection of SEND Services which confirmed that Rotherham’s practices and the support offer remained robust and effective

Resolved:-  (1)  That the progress in the recovery actions being taken via the Safety Valve Programme to manage the Dedicated School Grant (DSG) deficit in Rotherham be noted.

(2)  That the 2024/25 financial position of the DSG High Needs Budget and accumulated DSG deficit at the end of the Safety Valve Programme be noted.