The Shropshire Council Schools Forum met to discuss school funding arrangements for the upcoming financial year. The forum agreed to recommend the transfer of any remaining balance, up to 0.5% of the Schools Block, into the High Needs Block after fully funding individual schools in line with the national funding formula (NFF). Members also discussed and approved proposals for the central retention of Dedicated Schools Grant (DSG) and the Central School Services Block (CSSB) for 2026-27.

Transfer of Funding Between Blocks

The Schools Forum considered the transfer of funds between the Schools Block and the High Needs Block¹. The Schools Block remains ringfenced, but local authorities can transfer up to 0.5% of their Schools Block funding into another block with the Schools Forum's approval. To transfer an amount above 0.5%, approval would need to be sought from the Secretary of State for Education.

In previous financial years, the Schools Forum approved a transfer of up to 0.5% of the Schools Block to the High Needs Block to support the growing pressures on the high needs budget. In 2025-26, a balance of £476,000 (0.21%) was transferred from the Schools Block budget into the High Needs Block.

For 2026-27, the Schools Forum agreed to recommend the transfer of any remaining balance, up to 0.5% of the Schools Block, into the High Needs Block after fully funding individual schools in line with the NFF.

Central School Services Block 2026-27

The Schools Forum discussed and approved proposals for the Central School Services Block (CSSB) for 2026-27, as detailed in Paper D. The CSSB provides funding to local authorities to carry out central functions on behalf of pupils in state-funded maintained schools and academies. The funding is split into funding for historic commitments and funding for ongoing responsibilities.

The Education and Skills Funding Agency (ESFA) has reduced the historic commitments funding by 20% in its 2026-27 provisional allocation. However, the ESFA has stated that historic commitments funding will be protected from dropping below the total value of ongoing prudential borrowing or termination of employment costs . Shropshire Council will submit evidence to the ESFA to show that the value of ongoing prudential borrowing and termination of employment costs is far greater than the level at which the historic commitments funding will be reduced.

The Schools Forum approved the following recommendations:

• To note that the historic commitments value within Shropshire's CSSB funding allocation has been subjected to a 20% cut in funding by the ESFA in its 2026-27 provisional allocation. Consequently, the historic commitments element of Shropshire's 2026-27 CSSB allocation has been reduced by £210,336 to £841,344.
• To contribute £545,994 to fund a portion of ongoing pension commitments in the event that the appeal to the ESFA to protect the value of ongoing prudential borrowing and termination of employment costs is not successful, a reduction of £210,336 compared to 2025-26.
• To continue to contribute £295,350 to fund the ongoing revenue costs of funding prudential borrowing for the Monkmoor Campus Project.
• To the increased charge of £363,340 for the provision of a School Admissions Team.
• To the budget of £10,000 for the servicing of Schools Forum.
• To the increased charge of £330,059 for the annual copyright licensing fees.
• To continue to contribute £979,386 to ongoing responsibilities that the local authority provides for maintained schools and academies as per the detail of these costs outlined in Appendix C of Paper D.

Consultation on Central Retention of Dedicated Schools Grant from April 2026

The Schools Forum discussed the upcoming consultation with maintained schools regarding the central retention and delegation of Dedicated Schools Grant (DSG) funds for 2026–27. The consultation, detailed in Paper C, will cover key funding streams, options, and the rationale for each.

Stephen Waters outlined the distinction between de-delegation (central retention for services like maternity cover and trade union duties) and top-slicing (statutory functions such as redundancy funds, school finance, HR, and health and safety), explaining the historical context and statutory requirements.

The consultation will launch the week following the meeting, closing on 2 December, with decisions to be made at the Schools Forum on 11 December. John Rowe emphasised the importance of clear communication and providing working models to help schools understand the financial implications of their choices.

Participants discussed the impact of recent changes to maternity legislation, the need for more precise definitions of statutory functions, and the importance of ensuring that consultation documents are accessible and informative for all school leaders. The group agreed to strengthen consultation materials, include practical examples, and encourage maximum engagement from maintained schools to ensure informed decision-making.

School Funding Arrangements 2026-27

The Schools Forum considered specific local funding arrangements from April 2026, as detailed in Paper B, and agreed to recommend the transfer of any remaining balance, up to 0.5% of the Schools Block, into the High Needs Block after fully funding individual schools in line with the NFF.

The report detailed specific local funding arrangements from April 2026 for consideration and agreement by Schools Forum in relation to the potential transfer of funding between blocks.

The actual primary unit of funding (PUF) and secondary unit of funding (SUF) which will be used to calculate each local authority's schools block allocation has been published for 2026- 27. For Shropshire these equate to £5,963 per pupil and £7,196 per pupil, respectively. As a comparison, in 2025-26 Shropshire's PUF was £5,661 and SUF was £6,829.

The main features in the schools NFF for 2026-27 are:

• the basic entitlement values, FSM6² values, the lump sum and the minimum per pupil funding values have increased to reflect the rolling in of the three separate pay and pensions grants from 2024 to 2025: TPAG, TPECG and CSBG.
• a further increase has then been applied to these same factors to cover the remaining costs of the 2024 teachers' pay award in mainstream schools, so that the full 12 months of salary costs are fully funded at a national level
• on top of this, a further overall increase has been applied to school- and pupil-led factors, as well as to the split sites factor
• through the minimum per pupil funding levels, every primary school will attract at least £5,963 per pupil, and every secondary school at least £7,196 per pupil
• the funding floor will be cash flat at 0% so that schools will be protected from per pupil cash reductions in their pupil-led funding
• There are no structural changes being made to the NFF in 2026 to 2027 with the 16 mandatory NFF funding factors remaining the same.

Shropshire Council Financial Position

John Rowe, David, and Stephen Waters provided an update on Shropshire Council's financial emergency, including the request for exceptional financial support from central government, the current use of reserves, and the establishment of new financial controls and oversight boards.

John explained that Shropshire Council declared a financial emergency after projections showed that the Council's £34 million in reserves would be exhausted by the end of the financial year, driven by reduced funding and increased costs, particularly in adult and children's social care.

The Council has formally requested between £50 and £100 million in exceptional financial support from the Ministry for Housing, Communities and Local Government, which would be a loan rather than a grant, intended to provide budget stability and avoid a Section 114 notice³.

David described the introduction of additional financial controls, including delays in payments and enhanced checks, as well as the formation of an agreement board with independent oversight to ensure robust internal and external scrutiny of the Council's financial management.

The team highlighted ongoing engagement with local MPs and opposition councillors to ensure transparency and collective understanding of the financial position, with the aim of fostering a unified approach to addressing the crisis.

Dedicated Schools Grant Monitoring 2025-26

Stephen Waters, John Rowe, and colleagues presented an analysis of the high needs block deficit, drivers of increased expenditure, and the Council's strategy to manage demand, reduce reliance on independent placements, and improve local provision.

The high needs block is forecast to have a £23.5 million in-year deficit for 2025–26, contributing to a cumulative DSG deficit of £41 million, with the main pressures arising from increased numbers of Education, Health and Care Plans (EHCPs)⁴, higher banding levels, and rising costs in independent special schools.

The Council is investing in local special schools, reviewing banding structures, and expanding capacity to reduce the flow of pupils into costly independent placements, with a focus on early intervention and co-production with schools.

Officers described efforts to modify school environments and invest in local provision to strengthen the Council's position in tribunals, aiming to prevent placements in independent settings and achieve long-term cost savings.

Other Matters

• Schools Forum Membership and Representation: Sam Bradley, John Hitchings, and other members discussed current vacancies in the Schools Forum, the importance of broad sector representation, and strategies to improve attendance and engagement from all nominated groups. Sam Bradley reported three academy vacancies and one diocese vacancy, with additional notice of Sian Lines representing Diocese of Hereford and Councillor David Vasmer stepping down as an observer, and plans to resubmit expressions of interest to fill these roles.
• Update High Needs Monitoring Group: A high needs monitoring group has been established to oversee the DSG management plan, ensure transparency, and coordinate with other strategic boards, with invitations extended for broader forum participation.
• Update Severndale Funding Arrangements: John Rowe, Ali, and colleagues explained the recent review of Severndale School's funding arrangements, the introduction of a new banding system, and the implementation of a memorandum of understanding to ensure transparency, accountability, and alignment with pupil needs.
• Update Capital Allocation Works: Andy and colleagues provided an update on capital investments, including a £20 million mainstream expansion and £8.265 million for special school and hub places, with plans to add 358 new special school places over three years to meet rising demand.