Cheshire East has no plan in place to deal with its massive special needs budget deficit
By Belinda Ryan - Local Democracy Reporter 30th Jul 2025
Cheshire East has no plan in place to deal with its massive special needs budget deficit, just a seven-year proposal to bring spending back in line with grant income, a councillor said.
The DSG (dedicated school grant) overspend was reported to be about £112.1 million at the end of the 2024/25 financial year.
At this week's meeting of the audit and governance committee, chair Michael Beanland (Con) again expressed concern about the deficit which Cheshire East, like many other councils, is holding as a 'negative reserve'.
Cllr Beanland said: "It isn't recoverable. It's not a seven-year plan to eliminate the deficit, it's a seven-year plan to bring expenditure back in line with the grant incomes.
"There's no provision within this MTFS (medium term financial strategy) for a reduction of the deficit before or even after the seven years…
"I understand there's an override, and it's not required for payment, but this is a draw on the council's finances."
The DSG is a ring-fenced grant handed out by the Department for Education for school budgets.
The high needs funding block of the DSG is used to pay for SEND (special educational needs and disabilities) provision.
But, for many councils, the cost of SEND provision has outstripped government funding by tens of millions of pounds.
To stop local authorities going bust, any deficit associated with the DSG is kept off their books thanks to a statutory override.
This means Cheshire East is holding this deficit in a 'negative reserve', but it is paying interest on it.
The government recently announced it will extend the statutory override to keep councils' SEND spending deficits off their books for another two years, until the end of March 2028.
Cllr Sue Adams (Disley, Con) told the meeting by doing this 'it's really reduced the incentive for people to actually get on top of this, so that's a concern'.
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