Richmond's schools are facing a projected deficit of £5.3 million in their Dedicated Schools Grant (DSG) for the current financial year, leading to a cumulative deficit of £5.5 million by the end of March 2026. This significant shortfall was highlighted at a meeting of the Education and Children's Services Committee on Thursday, January 29, 2026.

The primary driver for this deficit is the underfunding of high needs education services, which support children and young people with special educational needs and disabilities (SEND). The number of Education, Health and Care Plans (EHCPs) continues to rise, with 2,095 young people having an EHCP by the end of the third quarter of the 2025/26 financial year. This increasing demand, coupled with rising costs and insufficient government funding, is placing considerable pressure on the DSG.

The total DSG allocation for 2026/27 is set to increase by 5.2% to £247.3 million. However, a significant portion of this increase is due to the roll-in of previously separate grants. The actual increase in grant funding for DSG-funded services is a more modest 2.12%. Officers described this as a poor education funding settlement given the current rate of inflation and the rising levels of need in schools, noting that The cost of high needs education services continued to exceed government funding.

The proposed breakdown of the £247.307 million DSG allocation for 2026/27 is as follows:

  • Schools Block: £168.544 million
  • Central School Services Block: £1.172 million
  • Early Years Block: £34.762 million
  • High Needs Block: £42.829 million

The High Needs Block, specifically earmarked for high needs education services, is projected to be £42.829 million. Further details on the budget can be found in the Education Childrens Budget Report 2026-27.

The committee meeting also discussed the overall financial health of the Education and Children's Services department, with a report detailing performance indicators for the third quarter of the 2025/26 financial year available here. A general fund breakdown for the same period can be accessed here.

More information regarding the committee's proceedings and agenda can be found in the Public reports pack.