Havering Council is grappling with a significant financial challenge, facing an estimated £45 million overspend in its Dedicated Schools Grant (DSG). This substantial deficit is primarily concentrated within the High Needs Block, which funds essential support for children with special educational needs and disabilities (SEND).
The escalating costs are driven by an increasing demand for specialist educational support. The report, presented to the Council's Cabinet on Wednesday, 16 September 2026, highlights that the current central government funding formula does not adequately cover these rising expenses for Havering and other local authorities across England. This overspend is a direct consequence of this demand and the funding shortfall.
The issue was detailed in the 1st Quarter Revenue and Capital Monitoring Report 2026/27, which provides a snapshot of the Council's financial position as of the end of June 2026. While the report projects a £22.8 million underspend across the General Fund, this will still require the use of £54.2 million in Exceptional Financial Support.
However, the Dedicated Schools Grant presents a starkly different picture. The projected £45 million overspend is a significant concern, with the cumulative overall DSG deficit forecasted to be carried forward to 2027-28, potentially reaching around £110 million. The Department for Levelling Up, Housing and Communities (MHCLG) has extended the Statutory Override for DSG until the end of the financial year 2027-28, offering some breathing room, though a specific timeline for addressing the current year's £45 million overspend has not been detailed.
Councillor Sue Benjamins, Deputy Leader of the Council and Cabinet Member for Finance, presented the monitoring report. She acknowledged the General Fund's underspend but emphasised the considerable pressure on the DSG. The report also revealed that 17 schools within the borough are currently operating with a budget deficit, with eight of these having a licensed deficit.
More details on the Council's financial reporting can be found in the Public reports pack 16th Sep 2026 Cabinet. The Agenda frontsheet 16th Sep 2026 Cabinet also provides context for the meeting.
