Purpose

That Cabinet approve use of £26.9m DfE funding to the SEND Capital Programme and the re-distribution of each grant between East Surrey and West Surrey and endorse the continued delivery of the approved SEND and AP Programmes and note the project budgets that will transfer with the projects to the new Unitary Authorities on 1 April 2027.

Decision

RESOLVED:

1. That Cabinet approves the allocation of £26,878,636 DfE funding (includes two allocations: £8,100,000 DfE alternative places grant in place of a proposed DfE Free School, and £18,778,636 High Needs Provision Capital Grant 2026/27, SEND capital funding for specialist places in academic year 2027/28) to Surrey County Council SEND and AP Capital Programmes budget.
2. That Cabinet approves the allocation of funding set out in option 1:

           I.        The £8,100,000 Alternative Funding will be allocated for additional specialist places in West Surrey meeting the needs of pupils with complex Autistic Spectrum Conditions.

          II.        The allocation of £18,778,636, 2026/27 High Needs Provision Capital Allocation Grant and Alternative Provision capital funding is split between East Surrey and West Surrey on a 45% and 55% basis, using the Department for Education methodology that was applied when allocating funding to Surrey County Council. This mirrors the allocation that would have been made by the DfE to East and West Surrey had Vesting Day been on 1 April 2026.

1. That Cabinet agrees that the funding will be utilised to deliver the projects set out in this paper for academic year 2027/28.
2. That Cabinet endorses the continued delivery of the approved SEND and AP Programmes and notes the project budgets in Part 2 of this paper, that will transfer to the new Unitary Authorities with projects planned and in progress on 1 April 2027 based on the geographic location of the project.
3. That Cabinet notes the existing delegation of authority to allocate resources from the approved SEND and AP Capital budgets required for individual projects over £1 million in capital funding to the Cabinet Member for Children, Families and Lifelong Learning, following Capital Property Panel’s (CPP) financial scrutiny and endorsement.
4. That Cabinet delegates authority to the Deputy Chief Executive, Executive Director of Resources and Section 151 officer, in consultation with the Director of Land and Property, to finalise and approve the terms of all associated legal contracts and agreements to facilitate the recommendations in this paper and gives approval to procure and delegates authority to approve the award of subsequent contracts to the supply chain for the delivery of all associated services required, in accordance with the Council’s Procurement and Contract Standing Orders.
5. That upon Approval of this paper the relevant Executive boards of East and West Surrey will be requested to proceed with procurement of these projects (listed in Annex 1), along with approval of the funding allocations in part 2 of this report. This will enable procurement projects to progress without unnecessary delays, supporting service continuity and operational resilience ahead of Vesting Day.
6. That Cabinet notes that these projects are not yet sufficiently developed, and no agreements have been finalised with the schools or trusts to date. Confirmation of the East and West Surrey capital budgets is needed to create a financial envelope in which these projects can be developed for delivery for September 2027. The projects in scope are set out in Annex 1 with an anonymised list which can then go forward if within budget.

Reasons for Decisions:

Establishing additional school places in specialist schools, and Specialist Bases in mainstream schools is business critical to ensure SCC discharges its statutory duties under Section 3 of the Local Government Act 1999, Sections 13 and 14 of the Education Act 1996 and Section 27 of the Children and Families Act 2014.

In addition to 2,555 places already approved to be delivered by 2030, the allocation of £18,778,636 2026/27 HNPCA and £8.1m Alternative Funding, totalling £26,878,636, would support up to 498 indicative specialist places by 2030, based on the DfE calculation of £54k capital per place which was applied to calculate the £8.1M Free school funding. This is a formula-based estimate for comparison purposes and does not represent the actual cost or number of places that will be delivered through the proposed projects, which are set out later in this report.

In February 2026 Cabinet agreed with the DfE proposal not to proceed with a proposed Free School and Surrey County Council has accepted the offer of alternative funding of £8.1m. £4.05m of the funding was appointed to Surrey County Council with the 2026/27. £4.05m is due in 2027/28 and the DfE will take Surrey County Council and the Shadow Authorities direction on whether to allocate to East or West Surrey. Option 1 recommends allocating the £8.1m to a project that meets the needs of pupils with Complex Needs in West Surrey addressing an identified gap in provision.

The DfE High needs provision capital allocations: explanatory note - GOV.UK explains how the DfE calculates and distributes the funding within the HNPCA 2026/27 between local authorities. The High needs provision capital allocations: guidance - GOV.UK published in June 2026 gives guidance to local authorities on the intended purpose of the funding. Option 1 recommends the £18.78m funding is split 45% to East Surrey and 55% to West Surrey, as it applies the calculations used by the DfE to allocate funding across all local authorities.

Agreeing the distribution of 2026/27 funding between East Surrey and West Surrey allows Surrey County Council to start work on projects to deliver additional specialist places for academic year 2027/28. It is noted that East Surrey and West Surrey will receive the next funding allocation directly from the DfE in Spring 2027 and the decisions made in this paper do not influence the 2027/28 or future allocations of funding from the DfE which is based on their own methodology using school population in the census and school capacity in Surrey County Council’s SCAP return.

Continuation of projects in progress in Annex 1, subject to Shadow Authority approval under section 24, to the new Unitary Authorities where projects have been developed and have moved to the delivery phase on vesting day 1st April 2027 will transfer to their respective East or West Local Authority based on the location of the project. This will ensure efficient completion of the projects provides a smooth transition for schools and their communities through Local Government Reorganisation.

(The decisions on this item can be called-in by the Children, Families, Lifelong Learning & Culture Select Committee)