Richmond schools are facing a significant financial challenge, with a projected £5 million budget shortfall for the 2025/26 financial year. Funding continues to be a challenge for schools, early years and post 16 providers, who all report increasing levels of need and tighter budgets.
The shortfall was discussed at a meeting of the Richmond Schools Forum on Thursday 20 November 2025, where members reviewed the Dedicated Schools Grant (DSG) budget and considered recommendations for the 2026/27 financial year.
The projected spend on DSG funded education services in 2025/26 is £240.001m, compared to a grant allocation of £234.976m, resulting in a £5.025m shortfall. This includes £0.500m for Education, Health and Care Plans (EHCPs) that are expected to be approved before the end of the financial year. The cumulative deficit is forecast to reach £5.250m by 31 March 2026, according to the 2025/26 Finance Update.
The report pack for the 2025/26 Finance Update noted that the overall fund is expected to be in deficit this year with the cumulative deficit forecast at £5.250m at 31st March 2026.
In response to the shortfall, the 2025/26 Finance Update report pack stated that Significant work continues across all partners to improve efficiency. The team is working hard to balance the ongoing need for cost reduction / cost mitigation with the statutory duty to effectively support young people.
The number of EHCPs has increased by 41 since 31 March 2025, reaching a total of 2,087. The minutes from the High Needs Block meeting on 6th October 2025, included as High Needs Block meeting minutes 6.10.2025, stated that the increase in post-16 pupil numbers with EHCPs is attributed to more young people with EHCPs working their way through the system.
High Needs Block Underfunding
The underfunding of high needs education remains a significant concern. The 2025/26 Finance Update noted that this remains a challenge in 2025/26. Projected spending is £46,652,908 against a budget allocation of £41,296,700, representing an overspend of £5,356,208. AfC are working with eight maintained schools to manage deficit budgets this year.