The Schools' Forum is scheduled to meet on Monday, 16 March 2026, to discuss the Dedicated Schools Grant (DSG) budget monitoring for 2025/26, forecast school balances, and school place planning. The forum will also consider recommendations from the High Needs Block Reference Group, which includes updates on government proposals for Special Educational Needs (SEN) reform.

Dedicated Schools Grant Budget Monitoring and Forecast School Balances

The meeting will review the Dedicated Schools Grant (DSG) allocation for 2025/26, which is £87.379 million. A forecast overspend of £299,000 is projected for the year, which would increase the cumulative DSG deficit from £3.287 million at the end of 2024/25 to £3.586 million by the end of 2025/26. The report indicates that three schools and one nursery school are forecasting deficits by the end of 2025/26, and support will be provided to these institutions. The forum will also be informed about the previously agreed process for clawbacks, which will be active from April 2026 based on 2025/26 year-end balances.

The detailed forecast of school balances shows that the total reserves held by schools at the end of March 2026 are estimated to be £4.368 million, a reduction from the previous year. However, four schools, including one maintained nursery, are predicted to be in deficit by the end of 2025/26. The report also highlights that six schools are predicting excessive balances – those exceeding Department for Education (DfE) guidance of 5% for secondary schools and 8% for nursery, primary, and special schools. A balance control mechanism (BCM) is set to be introduced from the 2026/27 financial year, based on 2025/26 year-end balances, with locally agreed thresholds for excessive balances.

Recommendations from the High Needs Block Reference Group

The Schools' Forum will receive an update on government policy proposals for SEN reform and feedback from the High Needs Block Reference Group (HNBRG). The HNBRG has been considering issues relevant to the management of the High Needs Block, which is facing significant financial pressure nationally due to increasing numbers of Education, Health and Care Plans (EHCPs), rising complexity of need, and the high cost of independent provision. Locally, RBKC's growth in EHCPs, though below London and national averages, is contributing to in-year pressure on the High Needs Block, with a cumulative deficit expected to increase.

The report will inform the forum about the government's Schools White Paper, Every Child Achieving and Thriving, which sets out a strategic direction for mainstream system transformation and includes proposals for SEN reform. Key proposals, subject to consultation, include a three-tier support system for pupils with SEN, with a new legal requirement for schools to create Individual Support Plans (ISPs) for all children with SEND. The government has also announced £4 billion in funding from early 2027 for earlier intervention and mainstream inclusion. The HNBRG has acknowledged the risk that unfunded statutory changes could increase in-year pressure. The forum will be asked to note these national policy developments and to consider recommending a response to the government consultation.

School Place Planning

The forum will be updated on school place planning across the Royal Borough of Kensington and Chelsea (RBKC). Despite efforts to reduce surplus capacity, a modest pupil yield from new housing developments is expected to continue presenting challenges over the next five years, with a risk of some schools becoming financially unviable. The report notes that schools have requested the Schools' Forum to consider how it can support them in understanding these risks and to explore commissioning an independent analysis, updating a previous review by the ISOS Partnership.

RBKC is experiencing a sustained decline in younger age cohorts, driven by lower birth rates, outward migration of families, and affordability pressures, mirroring London-wide trends. This has resulted in significant surplus capacity across the primary sector, with forecasts indicating this will persist for at least the next five years. While action has been taken to manage this, the surplus capacity continues to present financial and operational challenges for schools, potentially impacting staffing, curriculum, and financial resilience. In contrast, secondary schools remain well-subscribed. Major housing developments are anticipated to deliver additional homes, but the pupil yield is expected to be modest and insufficient to offset projected declines in primary demand in the short to medium term. The financial implications include ongoing pressures due to primary surplus capacity, rising SEND expenditure, and increasing operational costs. Commissioning an independent analysis is estimated to cost up to £15,000, and the current deficit means no budget resources are available in the current year. The forum will be asked to note the continued surplus of primary school places and associated risks, and to agree to the de-delegation of up to £15,000 in 2027/28 to fund an updated independent analysis.