The Shropshire Council Schools Forum met to discuss the council's financial position and how it affects school funding. The forum also considered the central retention of the Dedicated Schools Grant¹ (DSG) from April 2026, and reviewed the DSG monitoring report for the 2025-2026 financial year. Additionally, members received an update on the High Needs Block (HNB) monitoring group, capital allocation, and funding arrangements for Severndale Academy.

Dedicated Schools Grant Monitoring

The Schools Forum reviewed the Dedicated Schools Grant Monitoring 2025-26 report, which outlined the centrally retained DSG forecast outturn position at the end of October 2025. The report indicated a £23.454 million in-year deficit, which, when added to the £17.566 million revised deficit carried forward from 2024-25, results in an overall cumulative DSG deficit of £41.019 million.

Key points from the report included:

• High Needs Block (HNB): The centrally controlled HNB for 2025-26 is £35.455 million, excluding place funding. Despite a £3.450 million increase in Shropshire's HNB DSG allocation compared to 2024-25, a forecast overspend of £23.497 million is expected due to overall expenditure of £69.772 million.
• Top-Up Funding: There are forecast overspends of £6.286 million for top-up funding to mainstream schools and £4.879 million for top-up funding to special schools. The increase in top-up funding to special schools is attributed to changes in funding levels for two Shropshire special schools and the full-year effect of increased pupil numbers at Keystone Academy, to 120 pupils since September 2024.
• Post-16 Funding: A £0.915 million overspend is projected for post-16 funding at further education colleges and sixth form colleges, driven by a combination of factors, including the accounting of 2024-25 invoices in 2025-26 and new high-cost placements at an independent special post-16 provider.
• Independent Providers: Expenditure for 2025-26 is forecast to be 29% higher than 2024-25 levels, reaching £23.810 million, resulting in a forecast overspend of £9.221 million. This is due to a sharp increase in demand for independent special school placements and the more frequent use of independent alternative providers, particularly for post-16 students.
• SEN Support Services: A forecast overspend of £1.569 million is anticipated against the SEN Support Service budget of £1.947 million, primarily due to staffing costs and an increase in the use of external Speech and Language Therapists since 2024-25.

The report noted that the council's DSG financial position reflects continuing pressure on the total High Needs budget as expenditure continues to increase sharply year on year. The government has extended the statutory override to keep councils' spending deficits for special educational needs and disabilities (SEND) off their books for another two years until March 2028.

Central Retention of Dedicated Schools Grant

The Schools Forum considered a report on the central retention of Dedicated Schools Grant from April 2026. The report sought the views of maintained schools on the central retention of DSG in the next financial year, 2026-27. The Schools Forum is committed to consulting with maintained schools ahead of a Forum meeting on 11 December 2025, at which decisions on the de-delegation and top-slicing of DSG from April 2026 will be taken.

The government's school revenue budget settlement guidelines allow local authorities, following consultation with the maintained schools' community and with Schools Forum approval, to centrally retain DSG through de-delegation and top-slicing.

De-delegation involves centrally held budgets within the Schools Block of DSG that can be de-delegated from maintained schools by the sector representatives on Schools Forum, with decisions taken on an annual basis. Top-slicing allows local authorities to retain some of their Schools Block of DSG to carry out statutory duties for maintained schools, previously funded through general duties Education Services Grant (ESG), which was removed in September 2017.

The consultation document examined each of the areas for which delegated funds are taken from maintained schools and sought views on a number of options for how to proceed on each in 2026-27. The consultation ran until Tuesday 2 December 2025.

The areas for which funding can be de-delegated from maintained schools are:

• Pupil growth contingency
• Maternity cover
• Trade union duties
• School improvement

The areas for which funding has been top-sliced from maintained schools are:

• Redundancy fund
• Statutory school finance
• Statutory human resources and health and safety
• Education Access Service

Shropshire Council Financial Position

John Rowe updated the forum on Shropshire Council's financial emergency, which includes a £35 million overspend, stringent controls, and the risk of a Section 114 notice². He clarified that while maintained school budgets and high needs block funding are not directly affected, indirect impacts are possible due to the interconnectivity of services. He said that communication to schools and post-16 providers would continue to provide reassurance and clarity.

School Library Service

John Rowe shared information provided by Sarah Browne regarding the School Library Service (SLS). He advised that the service remains under pressure and has moved to a pay-as-you-go model. Schools were urged to buy into the service to ensure its sustainability, and feedback was to be gathered from heads on the service's value and needs. Mr Rowe highlighted the flexibility in the offer and value for money under the new plans, with further engagement planned.

High Needs Block Monitoring Group

John Rowe invited forum members to email Samantha Bradley if they were interested in joining a working group in relation to monitoring the High Needs Block (HNB). This was scheduled to be brought back to the next meeting for oversight.