BCP Council pushes new Labour government to address growing schools debt

BCP Council will be pushing the new Labour government to address the spiralling deficit on its schools’ budget – a “national issue” which it says “cannot be resolved at a local level”.

Funding from the government for special educational needs is currently £30m less than what is being spent by authority. By next year, when the growing debt on the the dedicated schools grant reaches £92m, the council will be “technically insolvent”, meaning the debt will be greater than the total reserves held.

In May, the authority wrote to the government asking for guidance on how it can achieve a legally balanced budget for next year, in light of the continued shortfall. It has also called on the Secretary of State for Education to urgently provide additional funding or write off the deficit for BCP and all local authorities affected.

Cabinet members were told during their latest meeting there had not yet been a response to that letter, and agreed to apply fresh pressure on the new administration.

Cllr Jeff Hanna, cabinet member for transformation and resources, told the meeting he was “staggered” to learn the council is paying £4m a year in debt interest alone.

“That’s £4m a year that could have helped us in terms of savings that did not need to be made,” he said. “That said, I do wonder just how far we are chasing to try to get this resolved.

“I appreciate we wrote the letter back in May, but that was two months ago now – I wonder if we are following up now we have a new government and a new department; are we pressing them for an urgent meeting?”

Cllr Stephen Bartlett, who sits on the overview and scrutiny committee which looks at the council’s budget, told the meeting the deficit had been a “burning issue” for more than 10 years.

“We understand that the council is doing all it can in order to resolve this,” he said. “But we’ve been living with this for a long time, and the problem just gets bigger and bigger.”

Deputy leader Cllr Millie Earl said the council needed to ensure the new government was “entirely informed” of the council’s financial position. “This is a national issue and requires a national solution,” she said.

“We can’t deal with this on a local level, and we need the government to recognise that because it’s going to take intervention from them.”

Cllr Mike Cox, cabinet member for finance, assured members the council would be putting pressure on the government to address the issue “sooner rather than later”.

“While I think we can give the new administration a week or two, I don’t think it can be any longer than that,” he said. “Because it’s desperate not just for BCP Council but for a number of councils across the country.”

As reported by the A&T, the government currently has in place a ‘statutory override’ which allows local authorities to ringfence their Dedicated Schools Grant (DSG) away from their core budgets.

BCP Council has kept this year’s £63m deficit on its schools budget off its balance sheets.

This reprieve ends in March 2026, and when it does many councils across the country are expected to be pushed into insolvency.

Earlier this year, the council wrote to the government to request the override be “urgently extended” to give local authorities “time and space to address the crisis in SEND funding and services”.

Members at the latest cabinet meeting thanked the council’s finance officers, along with Cllr Cox, for delivering a balanced budget for 2025/26 in spite of the “horrendous” financial challenges faced by the council.

Cllr Andy Martin, who represents Highcliffe, said: “I think it’s easy to underestimate and forget just how far this council has come in the last year. The challenges that lie ahead are clearly huge, but the achievement of restoring financial stability and credibility to the council, and at the same time, its reputation, must be highlighted.”