Agenda item

Salik Khan presented the 2026/27 Schools Budget report, outlining the Dedicated Schools Grant settlement, its distribution across funding blocks and key recommendations requiring Schools Forum approval.

The Dedicated Schools Grant structure remains unchanged for 2026/27 and it was confirmed that the funding allocation for this year comprised of £583.9m for the school’s block, £4.81m for the central school’s services block, an estimated £124.1m for the high needs block and an estimated £128.6m for early years.    

The DfE issued the 2026/27 schools block funding settlement on the 17^th December 2025 which due to the reduction in pupil numbers has resulted in a £4.6m reduction.

It was noted that there is going to be an expansion for the free school meal entitlement which will be funded through a separate grant, and once we receive the settlement, there will be a budget affordability gap of £1.9m requiring the minimum spending guarantee to be set at 0% to ensure that no school received less than in 2025/26.

Schools Forum were advised that to balance the affordability gap, any gains above 2.77% were capped and that gains were scaled at 50% to recover excess. 151 schools were affected by capping with 124 primary schools and 27 secondary schools. Salik advised that he will seek information from other relevant teams to help analyse on the likely increase in eligible pupils.

Action: Salik Khan to obtain analysis on the potential impact of the expansion for the free schools meals entitlement

Schools Forum were informed that the cumulative DSG deficit was £64.4m at end of 2024/25 and is projected to reach £111.9m in 2025/26 and if the trends continue, the deficit could rise to £460m by 2030. The CSSB allocation remained at £4.8m, including rolled-in elements formerly funded through SBSG and NSC grants. Historic commitments continue to reduce by 20% per year, with DfE expecting minimal continuation by 2030.

The early years block allocation is £128.6m based on hourly rates of £6.20 for 3–4-year-olds, £7.90 for 2-year-olds and £10.67 for under-twos, and local authorities must pass through 97% of the settlement to providers.

Appendix D outlines updated 2026/27 funding rates applied to withdrawn funding when a pupil is permanently excluded. This includes pupil-led factors such as FSM, mobility, prior attainment and associated top-up funding.

It was reported that without the TSIL programme, demand and placement costs would have been significantly higher, and the programme has shifted more EHCP pupils into mainstream settings, reducing reliance on high-cost independent placements and supporting operations and process change.

It was confirmed that around 80% of independent placements exceed £60,000 annually and 95% of placements are due to sufficiency gaps rather than needs that cannot be met locally.

Schools Forum were made aware that the COVID-era early years deficit has now been fully repaid and that provider base rates for 2026/27 for 3–4-year-olds are expected to be £5.70, a 5.95% increase on 2025/26.

It was confirmed that the authority is actively lobbying for fairer early years funding and the early years remain a priority within the white Paper. Additional inclusion funding may become available pending national guidance.

The LA made the following recommendations:

• That Schools Forum approves the retention of the budget to fund future school growth
• Yes: 8 No: 0              Abstained: 3

• That Schools Forum approve the retention of budgets to meet the prescribed statutory duties of the local authority and to meet historic costs (Paragraph 17, Items 3 & 4)
• Yes: 9             No: 0               Abstained: 2

• That Schools Forum approve the centrally retained early years funding (Paragraph 17, Item 5)
• Yes: 10          No: 0              Abstained: 1

Schools Forum approve the action to be taken in respect of schools where the Special Educational Needs (SEN) notional budget is insufficient to meet the aggregated value of High Needs Funding Element 2 (Paragraphs 72 - 74)

• Yes: 8             No: 0               Abstained: 3