Wandsworth has run up a £33m deficit supporting children with special educational needs, and a government bailout will write off most of it, if the council submits the right paperwork in time.
The grant will cover up to 90% of what the borough owes, leaving roughly £3.3m for the council to pay itself. The bailout only covers debt accumulated up to 31 March. Anything the council overspends after that date is on top of it.
Cabinet member at the time Cllr Judi Gasser told the council's scrutiny committee in February that the 90% write-off was available "as long as we show that we're running the service very well, which of course we are." Monday's published papers [pdf] confirm the annual overspend grew by 60% last year.
The bailout is not automatic
The grant requires two things: the council must submit a plan to the Department for Education by 19 June showing how it intends to reform the way it supports children with special needs, and the Department must then approve it. Both must happen. If only one does, or neither does, the bailout does not arrive.
As we reported in March, Wandsworth has not publicly confirmed it has submitted the plan, or that approval is expected. The deadline is five weeks away. If the plan fails, the council carries the full £33m itself, not £3.3m.
The council's own paper describes the grant as designed in part to "reduce the risk of insolvency" when a government accounting rule that lets councils carry these debts separately expires in 2028. After that, anything still owed comes out of the general budget, the same pot that pays for libraries, refuse collection and care for older residents. The government has said further support after 2028 will be "appropriate and proportionate, rather than open-ended." It has not promised to keep paying.
The overspend is growing fast
A year ago we reported the deficit at £21m and noted the council's own forecast that it could reach £40m by 2028 without action. At the last meeting in March it was around £30m. Monday's papers put the gap between what the council spent and what it received from government last year at £11.8m, up from £7.3m the year before. The overspend grew by 60% in a single year.
Even with the bailout, the £3.3m stays. So does everything the council overspends between now and 2028. At the current rate, the borough could enter 2028 with roughly £23m of new debt on top of the £3.3m. The council's own paper concedes the bailout "does not remove the need for sustained reform to address underlying drivers of demand and cost," which is how it describes the rising prices and rising numbers of children needing expensive placements.
What is driving the cost
Most of the money, and almost all of the growth, goes on placing children in private special schools (independent schools that specialise in particular types of need). The borough placed 254 children in them in 2020-21 at an average cost of £34,335 each. By March this year it was placing 361 children at £50,022 each. The number of children is up 42% in five years. The average price has risen 46%. In the last twelve months, the price rose a further 6.5% and the number of children placed grew 15.7%. The cost of this single line is rising at more than 22% a year.
By comparison, a place in an ordinary school costs the borough £12,339 a year.
The £678,000 nobody is talking about
The "Support Services" line within the special-needs budget (money that pays for council staff who help schools support children early, before they end up needing an expensive placement) has fallen from £1.54m to £866,000 in a single year. That is a cut of £678,000, or 44%. The report contains no explanation. The same paper records an extra £3.3m being spent on the most expensive placements.
The government wants the council to do more early support work in exchange for the bailout. That is precisely what this budget line was for.
Also in Monday's papers is a pilot called EBSNA Outreach, which helps children with severe school avoidance get back into class before they need a formal assessment and an expensive placement. After a year it can work with about three children at a time. Twenty schools refer children to it at each panel. Schools whose children do not get a place are, in the programme's own words, "desperate for advice." Annual cost: £121,987. The private placement pipeline it sits against costs £18m a year for 361 children. The direction is right. The scale is an order of magnitude off.
A word about the service itself
This is not a story about poor provision. Wandsworth's pupils with special needs rank sixth in England at Key Stage 2 and sixth nationally at GCSE. The borough meets the legal deadlines for assessing children's needs, achieving 100% in the most recently published figures. The council's own paper calls Wandsworth "a position of relative system strength." That is fair. The argument here is about money: a system performing well on outcomes can also be running at an £11.8m annual loss.
In the past month, at least four information requests on special educational needs have been escalated to the Information Commissioner's Office by a single requester. A council in dispute with parents and advocates over the existing system is simultaneously asking its school leaders to trust it to build a better one.
Monday's meeting is at 4.30pm in Room 122 of the Town Hall, Wandsworth High Street, SW18 2PU. Papers are at democracy.wandsworth.gov.uk [pdf].
