The Leicestershire Schools' Forum met on Tuesday, 9th September 2025, to discuss school deficit policies, funding transfers, and support for children with special educational needs and disabilities (SEND). The forum was also scheduled to review the minutes from their previous meeting. Discussions were expected to cover the deployment of a deficit budget policy for maintained schools, a proposed transfer of funds from the Schools Block to the High Needs Block, and a consultation on transitioning to a banded model for Education, Health and Care Plan (EHCP) funding.

2026/27 Schools Block Transfer

The forum was asked to consider a report on a proposed transfer of 0.5% of funding from the Schools Block to the High Needs Block for the 2026/27 financial year. The report stated that this transfer was intended to facilitate investment into the Special Educational Needs (SEN) Investment Fund, to enhance support for children and young people with Social, Emotional, and Mental Health (SEMH) needs within mainstream educational settings across Leicestershire.

The report noted that the Dedicated Schools Grant (DSG) High Needs Block for Leicestershire continues to face financial challenges, with a persistent and growing deficit. The report stressed that the proposed transfer was not intended to directly offset this deficit, but rather to build capacity within mainstream schools to mitigate future cost pressures and enhance educational provision.

The report mentioned that a similar funding transfer of 0.5% from the Schools Block to the High Needs Block was undertaken in the 2025/26 financial year, amounting to £2.8 million, and that this funding was invested into the SEN Investment Fund. The report stated that the intention to seek an annual transfer was established during the 2024 consultation.

The report also noted that Leicestershire's financial position highlights a projected annual high needs revenue gap that is expected to persist through the current Medium Term Financial Strategy.

The report stated that the Local Authority acknowledged concerns that the transfer's impact can fall unevenly, with schools experiencing the largest gains under the National Funding Formula¹ (NFF) contributing proportionally more to the transfer. The report stated that the Local Authority was exploring mechanisms to ensure a more equitable distribution of any future transfer for 2026/27, including the use of capping and scaling to moderate year-on-year per-pupil gains and to spread impact more fairly across schools.

The Schools Forum was asked to approve the Local Authority to proceed with a formal consultation with all schools regarding the proposed 0.5% transfer, and to provide comments on the proposed approach and the mechanisms for ensuring an equitable distribution of the transfer across schools. The report also noted that the Local Authority may seek approval directly from the Secretary of State should local consensus not be achieved following the consultation, as was the case for the 2025/26 transfer.

SEN Investment Fund 2025-26

The Schools' Forum was scheduled to receive an update on the development of the SEN Investment Fund for 2025/26. The fund is designed to support children and young people with Social, Emotional and Mental Health (SEMH) needs in mainstream educational settings.

The report stated that the offers have been co-produced with a working group of School Leaders and representatives from across SEND and Inclusion support services.

The offers to be launched in the Autumn term include:

• Fully funded SEMH training offered to all schools in Leicestershire, including training on trauma informed approaches, Attention Deficit Hyperactivity Disorder (ADHD), Progressive Masculinity (Secondary Schools), Emotionally Based School Non-Attendance (EBSNA), Zones of Regulation, Time to talk SEMH, and a reflective spaces supervision model for ELSAs².
• Primary school in-school Alternative Provision and Outreach Support, consisting of an extension of the existing support offer from Oakfield, drop-in support and additional capacity to enable a reduction in waiting times.
• Secondary school in-school Alternative Provision and Outreach Support, with a new multidisciplinary SEMH team offering outreach support in Secondary Schools from the new Oakfield Secondary.
• Online consultations focused on supporting professionals working with children and young people experiencing EBSNA.
• A directory of support and advice for parents of children with SEMH needs.
• A directory of SEMH support and advice for schools.

The report stated that impact measures have been developed to monitor the impact of the enhanced offers, and that regular monitoring and reporting will ensure that early feedback is used to tailor services.

Consultation on Transitioning to a Banded Model for Education, Health and Care Plan (EHCP) Funding

The Schools Forum was scheduled to receive an update on the consultation with Leicestershire schools regarding the transition to a banded model for assessing needs and determining top-up funding for EHCPs³, and to seek feedback on the proposed approach.

The report noted that the number of children and young people with EHCPs in Leicestershire has increased by 173% since 2016, rising from 2,995 to 8,169 plans at the end of August 2025.

The report stated that the current funding model for EHCPs allocates high needs top-up funding based on a nominal number of funded hours, which schools have indicated can be restrictive and does not always reflect the most effective support strategy for pupils with SEND. The proposed banded model aims to replace the funded-hours-based approach with a transparent, needs-led system using descriptors aligned to the four categories of SEN: Cognition and Learning, Communication and Interaction, Social, Emotional and Mental Health, and Sensory and/or Physical Needs.

The report stated that Leicestershire has developed a banded model based on needs descriptors, working with colleagues across Leicester City and Rutland County Councils. The proposed Leicestershire model has been co-produced with schools to ensure it closely matches need types and appropriate support offers as they are available within the County, and that Leicestershire's proposed needs descriptors are largely aligned to those developed for Leicester City.

The report stated that the move to a banded model will simplify the existing top-up funding models across mainstream, specialist units and special schools into a common banding system which will operate for all education providers, and that this will improve the consistency and efficiency of funding and offer greater flexibility and economies of scale for schools.

The report stated that the proposed bands (A–G) will be applied to new EHCPs from Spring 2026 and phased in for existing EHCPs during annual reviews over the 2025/26 and 2026/27 academic years.

The report stated that a consultation with schools on the proposed needs descriptors and banding approach will seek their support for the proposals, and feedback from schools will be used to shape the approach to implementation. This will be undertaken through a two-stage consultation process:

• Stage 1 will include a six-week consultation on the proposed needs descriptors and approach to banding which will run from early September to mid-October 2025 through an online survey.
• Stage 2 will consider the funding to be applied to each band and is proposed to run from late autumn/early Spring.

The Schools Forum was asked to note the proposed consultation and timeline, provide feedback on the proposed banded model and consultation approach, and support the engagement of schools in the consultation process.

Schools Forum Deployment of the Deficit Budget Policy for Maintained Schools

The Schools Forum was asked to note the Local Authority's plan to deploy the Deficit Budget Policy for maintained schools from Autumn 2025.

The report stated that the policy distinguishes between short-term pressures that can be rectified within a year and more structural issues that require a longer recovery horizon, and that it situates this within strengthened governance through a Schools in Financial Difficulty (SIFD) Panel, standardised documentation and a coherent support offer.

The report noted that an October 2025 budget resubmission and reforecast will reset all school submissions on common planning assumptions so that decisions are made against a consistent and transparent evidence base.

The policy rests on the principle that schools should plan to operate within their means and that any adverse balances must be deliberately planned, time-bound and monitored. Where a shortfall is modest and attributable to a one-off event or temporary timing issue, a Managed Deficit route will apply. Where the deficit is larger, recurrent or structural, a Licensed Deficit will be required.

The report stated that Governing Bodies remain accountable for financial stewardship and for ensuring that spending decisions align with the school's strategy and represent value for money, and that Headteachers, working with School Business Managers and senior teams, will lead the development of accurate forecasts, identify saving opportunities and income options, and engage openly with staff and stakeholders when changes are required.

The report stated that oversight will be provided by the SIFD Panel, which brings together Education, Schools Finance, HR, Internal Audit and Education Effectiveness to consider licensed deficit applications and to review progress on recovery cases.

The Schools Forum was invited to note the contents of this report and provide comments that will help refine implementation and strengthen the support available to schools.