The Dedicated Schools Grant deficit in Knowsley has ballooned to £43.8m, largely due to surging demand for special educational needs and disabilities (SEND) provision. The shortfall at the end of the 2025/26 financial year represents 21% of the total budget, up from £17.7m (8%) the previous year, including a £21.1m deficit carried forward.
High Needs Block Overspend
The majority of the deficit came from the high needs block, which overspent by £18.1m. This was primarily driven by an increase in the number of children requiring education, health and care plans (EHCPs). An EHCP is a legal document that guarantees support for young people with SEND up to age 25, including one-to-one teaching, specialised learning methods, or sensory-friendly environments.
Knowsley Council receives the Dedicated Schools Grant annually as ringfenced funding, managed separately from other services. Deficits are carried forward within the schools income received by the government. However, the council noted in a report: “It should be noted that as a consequence of carrying this debt on the council’s balance sheet, the council is effectively forgoing potential interest on investment of around £2m per year based on the latest forecasts.”
Capacity Challenges and School Positions
The council acknowledged that work is ongoing to improve capacity in SEND provision, but it remains below required levels, resulting in additional costs. The report, considered at the Knowsley Schools Forum on Thursday, also revealed that 20 primary schools ended the year in surplus, while 16 were in deficit. The borough’s one maintained secondary school, all special schools, and the pupil referral unit were in surplus, while academies receive funding directly from the government.
The government announced in February a stability grant to cover 90% of councils' Dedicated Schools Grant deficits as of March, contingent on approval of a local SEND reform plan by the Department for Education. Additionally, a SEND reforms white paper aims to overhaul support, slow EHCP growth through early intervention, and boost mainstream inclusion.
