Over the past five years, Cheshire East Council’s spend on Special Educational Needs Provision, has spiralled out-of-control. The £26m “deficit reserve” for SEND reported in February 2023 has now standing at £80m just over a year later and is set to rise further if the Labour-led administration don’t get to grips with it.
This debt sits outside the Council’s main budget (the MTFS) and it is recognised by Government, that many (although not all) Local Authorities, have experienced significant financial pressures in meeting the growing demand for SEND services during and since the pandemic.
Government has permitted affected Councils to set a “deficit reserve” in order that Councils can manage SEND provision outside their Council’s main budget systems - this provision is available until 2026 to enable Council’s to get their SEND service spends back on track.
At the same time, the Government set up the “Safety Valve” programme offering financial, technical and managerial support for councils with extremely high SEND deficits. For example Kent and Surrey County Councils have received significant financial support in recognition of the very high cost of caring for refugee and asylum-seeking children reaching British soil in recent years.
In addition, the Government have offered “Exceptional Financial Support” to Councils to help them maintain a balanced budget. It must be noted that this is effectively a loan (with interest, albeit at a low rate), that Council’s may draw down from Government. However, it must be paid back over a set time period (twenty years).
So what is Cheshire East Council doing?
• Cheshire East Council is a member of the Safety Valve programme but despite repeated requests for information and updates on progress from Conservative members of the Childrens & Families Committee and the Audit & Governance Committee over the past TWO years, the Council failed to submit a financial support request plan to Government until early 2024.
The results of that application are imminent BUT Without Safety Valve financial support, it is difficult to see how Labour-Independent run Cheshire East Council will be able to turn this debt around by 2026.
• Cheshire East Council, as well as having a rising “deficit reserve” to pay off at some point, they are also having to pay £6m this year alone in paying the interest on that debt.
* Cheshire East Council have had to seek “Exceptional Financial Support” from Government of which £6m is to pay the interest on the SEND deficit reserve ALONE! (Paying back a loan with interest to pay the interest on the debt is simply not sustainable!)
Where does Cheshire East go from here?
It’s difficult to predict what will happen next, as Cheshire East’s Labour-Independent Budget savings for 2023-24 have still not been met in full over a year later.
On top of that, a further £20m savings are required from the mainstream budget in 2024/25 (and a total of £100m savings in total over the next four years).
These savings can only come from the remaining Council services that residents depend upon.
All Councils have had rising demand on services as a result of cost-of-living pressures. The Council Leader Sam Corcoran (Labour) consistently blames the Government but the facts remain.
In just five years, under his Leadership and that of his deputy Craig Browne (Independent), Cheshire East has declined from a balanced budget position with a £1.4m surplus in Children’s finances, to being a significant national outlier in terms of its £80m SEND debt and the wider unsustainable finances of the Council as a whole.
REFERENCES
https://moderngov.cheshireeast.gov.uk/ecminutes/ieListDocuments.aspx?CI…
https://moderngov.cheshireeast.gov.uk/ecminutes/ieListDocuments.aspx?CI…
https://www.cheshireeast.gov.uk/council_and_democracy/council_informati…
