Agenda item

Report from the Head of Finance (CYPS).

Recommendations:

That Schools Forum:

1.    Notes the final reported outturn position for Local Authority maintained schools and centrally retained DSG budgets for 2025/26.

2.    Notes the latest budget projections for Rotherham’s maintained schools for 2026/27, including the identified financial risks relating to the schools and centrally retained DSG budgets.

The Head of Finance (CYPS) updated the Forum on the final 2025/26 outturn position for maintained schools and centrally retained DSG budgets, together with the latest 2026/27 funding and budget projections, highlighting the following:

2025/26 outturn position

·          The overall surplus position for maintained schools at the end of 2025/26 was broadly in line with previous years (after adjusting for schools that converted in the year), with a small number of schools remaining in deficit and supported through recovery plans.

·          A significant level of surplus balances was reported by some schools in 2025/26. Work has commenced  through the clawback process to review those positions and agree appropriate use of funds, with outcomes expected by September.

·          An overall deficit was reported in the centrally retained DSG budgets, primarily driven by significant pressures within the High Needs Block, although mitigated by underspend in early years. The high needs budget deficit is due to increased SEND demand, , alongside higher-than-anticipated pupil numbers and inflationary cost pressures.

·          The centrally retained DSG overspend has been transferred to the DSG reserve and will be carried forward into 2026/27 in line with statutory override arrangements.

·          The Government introduced a High Needs Stability Grant to support local authorities with significant historic DSG deficits. This financial support forms part of the wider SEND reforms and operates alongside the statutory override arrangements, which will remain in place until 31 March 2028.

2026/27 schools budget

·          Detailed budget plans were submitted by all maintained schools by May 2026. Schools budget plans are currently being assessed by the council to ensure they are realistic and achievable. A small number of schools are forecasting budget deficit - this is consistent with the previous year. These schools would be supported through financial recovery plan arrangements.

·          Key risks for school budgets in 2026/27 includes: uncertainty around teacher pay awards, ongoing inflationary pressures and falling pupil numbers.

·          The High Needs Block continued to represent a significant financial risk, driven by increasing SEND demand, cost pressures, and reliance on high-cost placements. Risks are further compounded by uncertainty linked to SEND reforms and wider funding constraints.

Forum Members discussed the early years block underspend, with clarification provided that this was primarily due to the lagged funding system and differences between planned and actual pupil numbers.  It was noted that a significant proportion of the reported underspend would be adjusted and recouped by the DfE following recalculation based on the January 2026 census data. Changes to the funding system from 2026/27, including termly census counts, are expected to reduce year end variances going forward.

Members discussed the impact and delivery of early years SEND support, highlighting rising levels of complexity in pupil needs. It was noted that work is underway with the Early Years team to strengthen tracking and monitoring, ensuring data is captured in a clear, consistent and usable format to support effective planning and provision.

Forum Members were also advised that further details on future PE and Sports Premium funding were awaited.

Resolved:

That the Schools Forum:

1.        Noted the final reported outturn position for Local Authority maintained schools and centrally retained DSG budgets for 2025/26.

2.        Noted the latest budget projections for Rotherham’s maintained schools for 2026/27, including the identified financial risks relating to the schools and centrally retained DSG budgets.