Greenwich Council Faces £8.87M Deficit in Dedicated Schools Grant, Submits Recovery Plan

Greenwich Council's Schools Forum has reported an £8.87 million deficit in the Dedicated Schools Grant (DSG) as of 31 March 2025. The forum met on Wednesday 16 July 2025 to discuss the outturn position of the 2024-25 DSG, as detailed in the 2024-25 Dedicated Schools Grant DSG Outturn Position report.

The DSG is a ring-fenced grant used to fund the schools budget. The deficit is attributed to overspending in some areas and underspending in others, requiring the local authority to submit a deficit recovery plan to the Department for Education (DfE). This plan will be presented to the Schools Forum for sign off.

According to the report discussed at the meeting, the deficit breaks down as follows:

• Schools Block: An underspend of £0.51 million. This block allocates funding for pupils in reception to year 11 in state-funded mainstream schools and academies. The underspend could be due to lower than expected demand for places, demographic changes, or changes in attendance patterns.
• Central Block: An overspend of £0.63 million. This fund supports maintained schools and academies, including elements such as DSG planned maintenance support for capital programmes, contingency funds, school admissions, and the Schools Forum itself.
• High Needs Block (HNB): An overspend of £11.47 million. This block supports provision for pupils and students with special educational needs and disabilities (SEND), from ages 0 to 25, and alternative provision for pupils who cannot receive their education in mainstream schools. Several factors contributed to this significant overspend, including:
  • Higher than anticipated independent school placement costs, despite initiatives aimed at reducing this expenditure.
  • Historical top-up costs for pupils attending all schools, particularly special schools and academies, and alternative provision.
  • A 10% increase in banding rates from September 2024, impacting all phases, following an independent review and benchmarking exercise to align with neighbouring local authorities.
  • Additional funding for SEN Support, an unfunded initiative launched in 2024-25 with a £2 million allocation to support schools exceeding their Notional SEN budget compared to the RBG average.
  • A review of Education, Health and Care Plans (EHCPs) to ensure all outstanding costs from previous years have been paid.
  • A significant increase of 506 EHCPs between January 2024 and January 2025, particularly in the nursery/reception and primary phases, compared to previous years' increases of 200-250.
• Early Years Block (EYB): An underspend of £2.43 million. Funding is allocated on a pupil number basis, calculated on termly pupil counts. The underspend may be attributed to lower than expected demand for places, particularly for 3 and 4-year-olds compared to under 2s, demographic shifts with families moving out of the area, and changing attendance patterns. It is anticipated that funding may be clawed back in 2025-26 due to these changes, with a report expected to the Schools Forum in October 2025.

The report noted that the deficit balance would need to be addressed, and the local authority would have to submit a deficit recovery plan for the DSG, using a management tool devised by the DfE. The LA will utilise the Management Tool proforma devised by the DfE to illustrate where savings can be made to bring the DSG back into budget, and this will be shared with the Schools Forum for sign off.