The Schools Forum of Manchester Council met on Monday 15 June 2026 to discuss the financial outturn of the Dedicated Schools Grant (DSG) for the 2025/26 academic year, proposed amendments to the Scheme for Financing Schools regarding academy conversion costs, and the implications of national SEND reforms and changes to free school meal eligibility.

Dedicated Schools Grant Outturn 2025/26

The meeting was scheduled to receive an update on the Dedicated Schools Grant (DSG) outturn for the 2025/26 academic year. The report indicated a cumulative retained DSG deficit of £59.220 million carried forward into 2026/27. It also highlighted the ongoing financial risk arising from DSG pressures, despite the extension of the statutory override to March 2028. A significant High Needs Block (HNB) outturn overspend of £29.269 million in 2025/26 was noted, underscoring the need for continued recovery action through the DSG management plan and the local SEND reform plan. The report detailed that the HNB overspend was primarily driven by the continuing rapid growth in demand for Education, Health and Care Plans (EHCPs) and the rising costs associated with them, particularly for Post-16 and independent sector placements. The Early Years Block reported a £317,000 overspend, while the Schools Block showed a £411,000 underspend due to lower expenditure on growth funding for additional school places. The Central Services Block was reported to be in line with budget, although admissions costs resulted in a small £21,000 overspend which the Council funded. The report also mentioned the potential for a 90% write-off of the accumulated DSG deficit by the Department for Education (DfE), subject to the approval of a Local SEND Reform Plan, which could reduce Manchester's deficit by up to £53.298 million.

Amendment to the Scheme for Financing Schools – Recovery of Academy Conversion Costs

A report was presented seeking approval to amend the Scheme for Financing Schools to enable the Local Authority to recover eligible academy conversion costs. This proposed amendment follows approval by the Council's Executive on 13 March 2026 to implement a charge to maintained schools contributing towards the Council's costs of supporting voluntary conversions to academy status. The report outlined a schedule of charges for conversions, with community and voluntary controlled schools facing a £10,000 charge, foundation schools £7,500, and voluntary aided schools £7,000. The proposed amendment to Section 6.2 of the Scheme for Financing Schools stated that charges would be recouped from the school's final budget share payment before conversion. Consultation with maintained schools on this proposal had taken place, with five responses received, including four comments that were responded to and clarified.

SEND Reforms and Funding Implications

The Schools Forum was scheduled to receive an update on national developments relating to SEND reform and the key funding streams announced by the Department for Education (DfE). The report detailed the requirement for Local Authorities to develop a Local SEND Reform Plan, outlining Manchester's progress and next steps. The national SEND reforms, published on 23 February 2026, represent a significant reshaping of SEND and wider school system policy, aiming for a more inclusive education system with increased investment and a focus on early intervention and mainstream capacity. Key funding streams announced include the £5.2 million Experts at Hand (EAH) and SEND Transformation Funding, the Inclusive Mainstream Fund (IMF) for mainstream schools, and the Inclusive Early Years (EY) Fund. Additionally, £10.29 million in SEND capital funding for 2026/27 was noted. The report also highlighted the High Needs Block (HNB) deficit grant, where the DfE would fund up to 90% of a Local Authority's deficit as at 31 March 2026, subject to the approval of a Local SEND Reform Plan. Manchester's draft plan had been submitted to DfE advisors, with initial feedback described as positive. The report acknowledged that despite reform investment, projected growth in EHCP numbers and increasing requests for specialist placements presented ongoing financial pressures on the High Needs Block.

Changes to Free School Meals from September 2026

The meeting was also scheduled to discuss changes to Free School Meals (FSM) eligibility from September 2026 and the associated FSM Expansion Grant arrangements. The report indicated that the Government announced an expansion of FSM eligibility in England from the start of the 2026/27 academic year, aiming to address child poverty and increase access to nutritious meals, with an estimated 500,000 additional pupils nationally becoming eligible. From September 2026, FSM eligibility will extend to all children in households receiving Universal Credit, removing the current earnings threshold. This expansion is supported by over £1 billion of funding across the Spending Review period, delivered through a dedicated grant. The report outlined that expanded FSM pupils would not attract Pupil Premium funding, which would remain linked to the targeted FSM cohort. Schools would be expected to manage increased application volumes and ensure catering capacity. The FSM Expansion Grant would be allocated based on the number of pupils eligible for the new expanded FSM, at a per-pupil rate of £295 for the period September 2026 to March 2027. The report projected a significant increase in eligible pupils across Manchester schools, given that Manchester already has 49% of pupils eligible for FSM, considerably higher than the national average of 26%.