The Havering Schools Funding Forum met to discuss and make decisions on various funding-related matters. They unanimously approved proposals for the allocation of the Dedicated Schools Grant, including funding for early years, schools, and central school services. However, a decision on carrying forward funds for Trade Union Facility Time was deferred pending further consultation.

High Needs Block Funding

The Schools Funding Forum received an update on High Needs funding for 2025-26. The Dedicated Schools Grant (DSG) is forecasting a £28.5 million overspend, which is equivalent to 14.8% of the total DSG budget. According to the Item 6 High Needs 2025-26 report, this overspend is driven by the High Needs Block¹, which is facing pressure due to rising demand for Special Educational Needs and Disabilities (SEND) provision. There is a 65% overspend in comparison to the Department for Education's (DfE) High Needs allocations for Havering, which highlights that the current funding formula from central government does not adequately reflect Havering's needs.

Key cost drivers include top-up funding for academies, colleges, and maintained schools, increased use of independent providers, and SEN support services. The cumulative DSG deficit is projected to reach £64.9 million by the end of 2026-27. The Department for Levelling Up, Housing and Communities (DLUHC) has extended the statutory override for DSG deficits until 2027-28, reducing the immediate impact on the council's general fund.

The government has committed £760 million to support SEND reform, as part of the upcoming Schools White Paper, with £547 million in 2026-27 and £213 million in 2027-28. The upcoming Schools White Paper, expected in autumn 2025, is anticipated to introduce changes to how schools support children with additional needs. These reforms may have significant implications for future funding and delivery models, and this will be closely monitored by the local authority (LA) as part of the wider SEND transformation programme that it is carrying out.

Dedicated Schools Grant Year-End Balance

The forum members were asked to agree to the allocation of funding in the financial year 2025-26, as set out in the proposals included in the report, and to note the areas of underspend from the 2024-25 Dedicated Schools Grant (DSG).

Hany Moussa, Principal Education Finance Officer, summarised that the carry-forward balance from centrally retained DSG from 2024-25 into 2025-26 was a deficit of £34.722 million. The revised deficit, after commitments have been taken into consideration, at the end of 2023-24 was £15.322 million, so the in-year increase was £19.4 million.

It was noted that during the financial year 2024-25, the revised forecasted return had been estimated to be up to £36.3 million. The reason for the deviation was due to the prudent approach taken due to Early Years (EY) entitlement expansion funding calculations which had led to a £1.7 million underspend.

The proposals were:

Early Years Block

• £1.3 million to allocate to providers as a one-off enhancement of the base rate in 2025-26 based on the summer term census data.
• £221,000 to be retained for SENIF² for the 2025-26 financial year to have means to support any additional demand.
• £154,000 to be retained for the 2025-26 financial year as the DfE had published new guidance stating that the LA would now have to submit census claims three times per year, so there would be potential infrastructure changes required in order to meet the additional demand.

A forum member questioned the £154,000 for central team staff and sought further clarity on what additional infrastructure would be needed. Hany Moussa, Principal Education Finance Officer, explained that the Early Years admissions team might need to add additional capacity to their team, and there may also be additional software costs as the current provider had a monopoly in the sector. Other options were being explored, however the provider had a strong hold of the market.

Trevor Cook, Assistant Director of Education, advised that what was presented was the indicative budget and not the actual spend. It was hoped therefore that not all the funds would be required.

Forum members voted and unanimously agreed to the proposals.

Schools Block

£220,000 to be retained for growth to support start-up costs for the new Balgores special school.

Trevor Cook, Assistant Director of Education, advised that start-up costs of such a large special school were sizeable, and the LA had benchmarked with other similar projects within the London boroughs. Costs would however be staggered over the period between now and the opening of the school, which was scheduled for September 2027.

Forum members voted and unanimously agreed to the proposal.

Central Schools Block

£1,000 to be allocated to School Partnerships/SCC.

Forum members voted and unanimously agreed to the proposal.

De-Delegation

Carry forward £46,000 for the re-organisation of arrangements for TUFT³ as part of the COSWP⁴. This figure was composed of the cumulative balance from the previous year (£26,000), in-year de-delegation (£2,000), and academy buyback (£18,000).

George Blake, Teaching staff union representative, summarised for forum members the work of the district officers and stressed that their role was not to work at odds with education colleagues but to support with HR procedures and where possible de-escalate situations to avoid more formal (and more costly financially and time) processes and procedures. He reported that there were currently three district NEU⁵ officers, all of whom had high caseloads. If the district officers did not have the time to resolve the issue, these would be referred to the regional officer, which would delay the process which was not ideal for either the employee, or the school.

The chair reiterated that as de-delegated funds, this was for maintained schools only and that academies had to make their own TUFT arrangements. George Blake, Teaching staff union representative, responded that he would also like to see more academies contributing to trade union time. Funding forum members therefore sought clarification that some of the TUFT from de-delegated funds was being used to support employees of academies. George Blake, Teaching staff union representative, responded that although maintained schools were prioritised, academy employees were also supported.

Funding forum members shared concerns as they had been unaware that facility time that maintained schools were funding was also being used for the academy sector where, for some, no financial contribution had been made for this support. Maintained schools should not be subsidising academies.

Trevor Cook, Assistant Director of Education, stated that this was an ongoing discussion with the COSWP group. The LA had been clear that all unions should not support colleagues who were not contributing to facility time. The group was looking at whether funds could be allocated based on members, however finalised numbers were awaited from one of the unions. If unions choose to work under alternative arrangements then the unions should invoice these schools directly.

In response, the chair explained that this also raised the question why all schools could not use an invoice system, as this could be a cost saving; it was not acceptable to bill one group of schools, and not the other.

An academy representative stated that two years previously, discussions had been held about having more clarity around TUFT and the support that union members received; more details had been requested by the NEU, however this information had not been shared. It was added, that the experience of trade union reps had been working against the school, hence the reluctance from some to pay into this system. George Blake, Teaching staff union representative, responded that he understood this impression, during hearings the reps were there to support the employee, however reiterated that there was work going on in the background about trying to resolve and de-escalate issues early. If there were no district officers, the regional support could take much longer. Julia Newman, Support staff union representative, supported and explained that the role at times was to act as a mediator between the school and the employee, with this there would be an increase in formal proceedings.

The chair thanked George Blake, Teaching staff union representative, and Julia Newman, Support staff union representative, for their input, especially for the transparency from George Blake, Teaching staff union representative, which was appreciated. Forum members also stated that their concern was not with the quality of the union representation, just the funding element and, for this meeting, the focus had to be financial.

Referring to the proposal, Katherine Heffernan, Head of Finance (Business Partnering), explained that the loss against EAL⁶ and Attendance and Behaviour had been largely offset by Maternity and Insurance.

Forum members (maintained schools only) voted and agreed to the proposal.

With regards to the element around TUFT, forum members were not willing to agree without consulting with the respective clusters. The vice chair questioned, if not agreed, would the maintained schools be compromising their schools. Katherine Heffernan, Head of Finance (Business Partnering), gave reassurance that the de-delegation for this year had already been agreed. Trevor Cook, Assistant Director of Education, suggested that the proposal was agreed in principal, however was subject to cluster feedback and an update at the next meeting on the potential allocation model of funding; a final decision would therefore be made in October 2025.

Forum members (maintained schools only) agreed to the proposal for the carry forward as long as it was based on a further discussion/decision in the autumn term.

LA Maintained Schools' Balances 2024-25

The report provided an analysis of the LA maintained school balances carried forward from 2024-25 into 2025-26.

Forum members were advised that the net balance was now in a negative for the first time; the deficit outweighed the contingencies. Katherine Heffernan, Head of Finance (Business Partnering), explained that the schools who were already in deficit at the end of financial year 2023-24 had increased their deficit, however those in surplus had remained in a similar position. She shared her concern regarding the deficit, especially as there had been an injection into the high needs funding rate over 2024-25.

Katherine Heffernan, Head of Finance (Business Partnering), acknowledged that the financial situation was causing a number of schools a number of difficulties and stress, however advised that the LA was now in the position where it had to take a more rigorous stance. From this year, as part of the budget setting process, schools in deficit would need to provide an in-year deficit recovery plan. She reiterated that it was not the expectation that schools would be able to clear their deficits over one financial year; that was not a viable scenario, however in-year deficits had to stop increasing. Forum members were advised that the current financial state contravened DfE and LA regulations. The finance team had received the three-year budgets and would be having discussions with any school whose budget was not showing a recovery position within this period.

Katherine Heffernan, Head of Finance (Business Partnering), stressed that the LA had listened to feedback from headteachers, hence the increase in High Needs funding and the changes made to the falling rolls funding. There were some schools with a healthy surplus, and although the LA was not looking to 'claw back' surplus, consideration would be given when looking at falling rolls or other additional funding as to whether it was required.

As previously suggested, Katherine Heffernan, Head of Finance (Business Partnering), proposed establishing a working group to look at school balances to identify common themes and to work together to resolve issues. Hany Moussa, Principal Education Finance Officer, added that the aim of the group would be for peer support and to encourage good practice.

The chair noted the seriousness of the deficit, however also acknowledged that for schools in deficit, the situation was highly stressful and that no one was spending money inappropriately. If the LA wanted to establish this group, then the Terms of Reference would need to be very clear and suggestions would need to be in the school's gift to deliver upon. For example, advising schools to get their funding for EHCPs⁷ quicker was not within their control. The chair reminded colleagues that even schools with a surplus had to be mindful, that this could be wiped away very quickly.

A forum member suggested that there needed to be more efficient joined-up working and gave an anonymised example of a school with a healthy surplus receiving SEND capital funding where this could have been used to support another school to improve their provision.

It was requested for forum members to have more information to provide an informed narrative; the nine schools who had been in deficit for over five years were of greatest concern, and therefore what were the reasons for their deficits so that it would be clear in terms of the focus areas. Katherine Heffernan, Head of Finance (Business Partnering), advised that such stratification was available internally.

A forum member asked how many of the schools with deficits had high SEN pupil numbers. In response, it was suggested that this would be difficult to ascertain as schools with high numbers of SEN pupils all managed them differently; some schools had had to make painful choices in order to avoid a deficit position.

Referring to the proposed working group, the idea was given that the group should also include those schools on the cusp of a deficit, as a preventative measure. Katherine Heffernan, Head of Finance (Business Partnering), agreed and explained that she was also looking at those schools who although had a surplus, had shown in-year deficits and therefore would likely soon be in a deficit position.

Katherine Heffernan, Head of Finance (Business Partnering), was asked about the approval of the deficit recovery plans; feedback from one of the clusters had been that very similar plans had been submitted as headteachers had worked together, however only one had been approved, which could breed negativity between schools. Katherine Heffernan, Head of Finance (Business Partnering), clarified that only plans which showed recovery back into a balanced budget were approved, and added that headteachers should have been informed, and that clearer communication would be a focus for the team moving forward.

A forum member shared their experience about being in significant deficit; this had been as a result of being asked to lead a federation which included one failing school. Due to low pupil numbers, the budget deficit had grown and therefore, although the school was now thriving and at PAN⁸, it was incredibly hard to claw back that historical deficit even when in-year saving of £300,000 had been made.

The recommendation was given by a forum member that part of the remit of the working group was to support schools to be more accurate in their budget setting.

Information was sought about how other LAs managed school deficits. Feedback was given that there was a different, more robust approach in Essex where schools in deficit had their financial delegated powers removed. Katherine Heffernan, Head of Finance (Business Partnering), responded that such an action would not be viable for the number of schools currently in deficit, however agreed that some schools may have to be targeted but it would have to be for the right reasons.

Forum members agreed that schools were carrying the burden as a result of a number of services being stretched; headteachers and school staff had multifaceted roles that included health, social care, and safeguarding in addition to teaching and learning.

Forum members noted the report and the idea of establishing a working party subject to clear TOR⁹.

Section 151 Budget Submission 2025-26

The report presented the Section 251 budget statement for the financial year 2025-26.

Forum members were advised that LAs were required under Section 251 of the Apprenticeships, Skills, Children and Learning Act 2009 to prepare and submit an education and children and young people's services budget statement to the DfE by 30 April each year.

Hany Moussa, Principal Education Finance Officer, advised that the projected deficit for 2025-26 for the DSG was £63,201,274, which was an increase from £34.7 million from 2024-25.

Forum members noted the Section 151 budget statements.

Early Years Funding Update

The report outlined the proposed changes in the entitlement to funded Early Years provision, the Early Years Expansion Grant, and the DfE change to the LA data collection for the Early Years Block funding from 2026-27.

Katherine Heffernan, Head of Finance (Business Partnering), reported that the proposed changes had already been shared with the EYPRG¹⁰. The report provided further details regarding the expansion of the Early Years provision along with the timeline alongside an explanation regarding the funding rates in place and the Early Years grant expansion.

Forum members noted the report.

High Needs Funding Rates 2025-26

The report detailed the High Needs funding arrangements and rates for schools for 2025-26 and the High Needs Task and Finish group.

Katherine Heffernan, Head of Finance (Business Partnering), summarised that approval had eventually been received to move the 2024-25 top-up funding for mainstream schools to £19 per hour, which would increase to £20 per hour for 2025-26. She advised that the rate covered additional NIC¹¹ costs and some of the provision, and highlighted that £20 per hour was very generous in comparison with some other boroughs.

Although the current method was to use an hourly rate, there had been a lot of discussion in the High Need Working Group about moving away from this approach to banding. The report showed the initial mapping proposal which illustrated how the current rates would move across into bands.

Katherine Heffernan, Head of Finance (Business Partnering), reported that the team had been working with a neighbouring borough which paid a much lower rate of top-up funding. Up to 2024-25, the LA had made the payment to schools and then recovered the funding from the relevant borough. However, there had not been a great deal of success getting this money back. Discussion had also been held about the rate they used which, as described, was lower; in addition, a smaller number of hours were funded across just three bands. Where payments had been made and not received, this had led to a shortfall which had contributed to the High Needs deficit by £400,000. For 2024-25, schools have not received this funding, and Katherine Heffernan, Head of Finance (Business Partnering), recognised that it was not a satisfactory situation.

It was questioned if this issue related to a large number of pupils, and although the exact number was not known offhand, it was estimated to be between 30-60 pupils. Katherine Heffernan, Head of Finance (Business Partnering), explained that in the neighbouring borough, schools had to invoice Havering directly to get the funding. It was noted that the team would engage with the legal team if required. Trevor Cook, Assistant Director of Education, added that there were a lot of similar conversations going on about other cross-borough services due to the ambiguity in DfE guidance and different interpretations.

Forum members noted the report and agreed to the resumption of the High Needs Task and Finish group, and specialist sub-groups, to review current year and future year arrangements for High Needs funding levels and support.

Central Schools Services Block 2026-27

The report summarised the locally projected DSG Central Schools Services Block (CSSB) funding for the financial year 2026-27 and sought approval for the retention of funding to maintain central statutory services.

The DfE Operational Guidance requires Schools Forum approval for the central retention of this funding.

Indicative funding for 2026-27 through the DSG Central Service Block has been delayed and is due to be announced by the DfE after the autumn budget statement in late November.

In advance of the announcement, below is the projected allocation with an uplift of 3.0% to the per-pupil rate for the CSSB. The table below has comparable data from 2025-26.

The services that LAs can fund from the CSSB are set out in the extract from the Operational Guidance, which we have used the 2025-26 version as the basis for the 2026-27, due to the delay of the release for 2026-27 allocations and guidance. For Havering, these services are as follows:

The copyright licence costs tend to increase each year, but LAs are not notified of the increase until later in the year. An estimated sum of £288,400 has been included. Areas relating to salary costs have been increased by 3.0%. The actual increase in cost is likely to be aligned or more than what has been projected.

Continuing the financial year arrangements for this element of the grant, the LA is proposing that for 2026-27 that this continues to be used for items that are accessible to a large number of schools. This includes the coaching bursary, Havering Academy of Leadership, and support commissioned on behalf of all schools.

Schools Funding Forum approval is requested for this use of the CSSB.

The Schools Funding Forum:

• Noted the projected allocation of CSSB for 2026-27.
• Considered the request to retain funding for central statutory services.

Early Years Funding Update

The report outlined the revision to the estimated carry-forward and confirmation of the distribution of the supplementary rate paid in the summer term from the carry-forward.

Following the July 2025 update of the 2024-25 Early Years funding allocations, an update to the previously reported carry-forward balance has been confirmed. The revision relates primarily to the 2024 autumn term PTEs¹². Havering's internal calculations remain correct, however, earlier internal figures overstated the PTEs compared with the data the DfE collected from the Census returns.

The PTEs used for Havering's 2024-25 final funding allocation for the new working parents entitlements, with weighted PTEs reflecting the number of weeks funded per term (Summer = 12, Autumn = 14, Spring = 12), are shown below:

The impact to the accrued amount, which formed the carry-forward amount, is as follows:

As a result of the update, the overall Early Years carry-forward balance is revised from the originally disclosed amount of £1.744 million to £1.003 million as below, with the agreed distributions indicated.

The overall funding for the supplementary rate was revised, and the supplement for the summer term only was for 32p per hour. This was valid for all claims in the summer term, and the funding was made payable at the end of the term. The distribution and average for each type of setting is as per the table below.

The Schools Funding Forum noted the report.

School Funding Forum Meetings Academic Year 2025-26

The report proposed dates for the meetings of the Schools Funding Forum for the academic year 2025-26 and invited members to discuss meeting arrangements.

The dates were agreed as:

• Thursday 2nd October 2025
• Thursday 23rd October 2025
• Thursday 27th November 2025
• Thursday 15th February 2026
• Thursday 12th February 2026
• Thursday 11th June 2026