Devon to use around quarter of reserves to shore up special needs

Devon will use around a quarter of its reserves to help plug the financial hole in its special educational needs and disabilities (Send) service.

The council struck a deal with the government for a £95 million bailout earlier this year to help it tackle the cumulative deficit of more than £160 million in the Send budget.
At the time, the council said it would use £20 million of reserves as part of a plan to “bring the budget back into line”.
But the authority will now spend nearly £29 million of its £100 million of reserves as part of a so-called safety valve agreement it has with the Department for Education, and is expected to contribute over £6 million this financial year.
This year alone, though, the Sed budget is expected to overspend by more than £38 million.
This could be problematic, as under the agreement, it is only allowed to overspend by £31 million this financial year, meaning it needs to cut £7.4 million from the service.
Angie Stewart, the council’s director of finance, said there is a cross-council effort to “drive the savings and get us to budget”.
“We are committed to that £31 million [overspend limit],” she said. “That means we need to put effort in to get there. If at the end of the financial year we’re at £33 million, then £2 million would need to be made good by Devon.
“That happened last year when we put £1 million extra into [reducing] the deficit.”
She added that some other councils “including some not too far away from us” had not been able to live within the constraints of the safety valve agreement and so had seen their government support suspended.
“We are not in that situation,” she added.
“We are working to achieve that £7.4 million we need to save; it is a big ask but should be achievable.”
Ms Stewart’s report added that the council also had a separate pot of reserves at around £16 million.
Cllr Julian Brazil (Liberal Democrat, Kingsbridge) said he was “yet to see how we are going to achieve those savings. They are massive within a budget that is under pressure.”
He acknowledged that Send overspending is a national issue, but feared that if reserves had to continue to be used at such scale, “we’re going to end up bankrupt sooner rather than later”.
Cllr Frank Biederman (Independent, Fremington Rural) is concerned about the impact on Send service users if the budget savings are achieved.
“If we hit that maximum deficit target, what will the impact be? Is there an impact assessment I can read to find out what the impact on schools and families could be?” he asked.
Cllr Caroline Leaver (Liberal Democrat, Barnstaple South) asked whether the authority was “worried about the overspend”.
And Cllr Phil Twiss (Conservative, Feniton & Honiton) said using reserves was part of a planned contribution, and the council’s plan to make the Send service more efficient should yield results soon.
The council’s chief executive, Donna Manson, said Send is “the number one issue” among her peers in other authorities.
“From the county council chief executives’ network, safety valve is a concern, Send is a concern, and transformation is a concern,” she said.