The Leicestershire Schools' Forum met on Monday 23 February 2026 to discuss the 2026-27 school budget, de-delegation for school improvement, and the proposal to extend the SEN Investment Fund. The forum approved the continuation of the exceptional premises factor and endorsed the submission of a disapplication request to the Department for Education (DfE).

School Budgets and Sustainability

The forum received a report outlining the financial position of maintained schools across Leicestershire. It was noted that the overall balance position had moved from a small surplus in 2024-25 to a net deficit by the end of 2025-26. Of the 61 maintained schools that submitted budgets, 45 were projecting a deficit in 2026-27, with an aggregate deficit forecast to rise from £9.83 million to £28 million by 2029-30. Salik Khan, LCC Education Finance Manager, highlighted that this represented an improvement from a previous forecast of a £17 million deficit, attributed to factors including the Local Authority Intervention Programme. However, structural causes for the deficits were identified, including falling pupil rolls, fixed leadership and premises costs, pay inflation, and emerging needs not yet covered by Education, Health and Care Plan (EHCP) funding.

The report also detailed the formal intervention framework, including the school sustainability workstream, budget policy, deficit panels, financial planning assumptions, training, monitoring, external specialist review, and the School Place Planning Strategy 2026-2031. It was acknowledged that the pressure on some schools remained more acute due to uneven distribution of resources. In response to questions about school capacity, Salik Khan committed to checking if data on capacity against school rolls could be shared with forum members.

Concerns were raised about the £17 million saving and £28 million deficits, with questions about how much of this encompassed pension savings versus efficiency savings, and what corrective actions were in place to reduce debt further. Tim Browne, LCC Director for Education, SEND & Inclusion, clarified that these were cost avoidance measures rather than savings. He explained that work was ongoing to refine forecasting arrangements, with oversight provided by the Schools Suitability Programme and the Schools Sustainability Board. Actions were being put in place to address accumulated deficits, largely caused by falling rolls.

Possible solutions for schools with persistent deficits were outlined, including combining infant and junior schools, amalgamations, academisation, or closure as a last resort. The Board would prioritise actions based on detailed budget reviews and local needs, with regular updates to the Forum.

Alex Clarke inquired about the impact of the Housing Strategy on school place planning, noting that low primary pupil numbers would eventually affect secondary schools. Tim Browne acknowledged this, stating that new developments would compensate, with a projected number of secondary schools to be built over the next 10 years. The team would ensure existing provision was not undermined and would look to expand existing schools to increase viability and build stock, with a phased approach to new school openings to avoid destabilising the system.

Pete Leatherland questioned whether the plan would be brought to the Leicestershire Schools' Forum for visibility and reassurance that money was being saved. Tim Browne confirmed that Salik Khan was working on a policy framework. Schools unable to set a balanced budget would need to apply for a licence deficit from the Local Authority and present a debt recovery plan, which would be scrutinised by the Schools Sustainability Board. Priority actions to return to a balanced budget position would be agreed with each school. A meeting with all maintained primary heads would be scheduled for the autumn term to outline next steps in supporting a School Sustainability programme.

Phil Lewin asked about the extent to which information had been shared more widely and the mechanisms used to manage maintained schools and academies. Tim Browne noted that the report was in the public domain and that open and honest discussions would be held with schools, acknowledging that not all schools wished to become academies due to deficits and falling pupil rolls.

Jude Mellor inquired about support for headteachers facing challenging financial circumstances. Tim Browne stated that he attended Leicestershire school meetings to raise concerns and have discussions, and that communications had been published to offer reassurance. Contingency measures, such as a 5% budget line, would be discussed. The team had been responsive to changing patterns of identified needs, and wellbeing support offers for headteachers were available. The Education Effectiveness Partners worked closely with maintained heads, offering significant and timely support.

Salik Khan explained that the 2025-2026 budget submission involved two submissions: one based on consistent and comparative local financial assumptions, and a second based on 0% inflationary assumptions. Guidance and workshops had been issued, and a new software, 'Accessing Local Authority', had been introduced with training provided. The £17 million figure encompassed the Integrated Curriculum and Financial Planning (ICFP) and restructures. He also shared that recovery plans for individual schools were in place, with a consultant firm commissioned to review all school budgets.

De-Delegation - School Improvement

The Leicestershire Schools' Forum approved the continuation of the exceptional premises factor for 2026-27 and endorsed the submission of a disapplication request to the DfE. This factor allows for the funding of rental costs for premises and/or sports facilities for seven schools, totalling £81,710. The DfE had approved this disapplication request for 2026-27. The proposal to de-delegate £18 per pupil from maintained school budget shares to fund local authority-led school improvement functions for the financial year 2026-27 was also approved by maintained school representatives. This included approval for the retention of any surplus within de-delegated funds for school improvement 2025-26 to the Schools Block, earmarked for school improvement activities in the next financial year. Furthermore, any deficit arising within de-delegated school improvement funds would be carried forward to the next funding period as part of the Dedicated Schools Grant (DSG) outturn process.

2026-27 School Budget

The forum noted the report presenting the 2026-27 Dedicated Schools Grant Settlement for Leicestershire and the 2026-27 Schools Budget. Key recommendations approved included the retention of the budget to fund future school growth, meet prescribed statutory duties of the local authority and historic costs, and to retain centrally early years funding. The forum also noted the use of the exceptional premises factor and the actions taken by the local authority in applying Capping and Scaling to the National Funding Formula (NFF). The report detailed the estimated £841.5 million DSG for 2026-27, divided into four blocks: Schools (£583.9m), Central School Services (£4.81m), High Needs (£124.1m), and Early Years (£128.6m).

The Schools Block allocation showed an increase of £7.78 million compared to 2025-26, despite a decrease in pupil numbers. This increase was largely due to the incorporation of the National Insurance Contribution Grant and School Budget Support Grant into the NFF. The report highlighted that the NFF for schools is based on national consistent funding rates, with 74.3% of funding allocated through the basic entitlement.

The High Needs Block allocation was estimated at £124.1 million, with a projected cumulative deficit of £111.9 million by the end of 2025-26, potentially rising to £460 million by March 2030 if demand continued on a similar trajectory. This unsustainable financial position was attributed to rising SEND demands and EHCP growth. Mitigation efforts, including the Transforming SEND & Inclusion in Leicestershire (TSIL) programme, had delivered cost avoidance of £34 million, but further actions were deemed necessary.

The Central Services Block was updated to £4.8m for 2026-27, incorporating the School Budget Support Grant and National Insurance Contributions Grant elements. The Early Years Block budget confirmed that Leicestershire County Council had met the minimum pass-through rate of 97% to providers.

Proposal To Extend The SEN Investment Fund For 2026-27

The Leicestershire Schools' Forum considered the consultation feedback on the proposed 0.5% transfer from the schools block to the high needs block for 2026-27 to fund the SEN Investment Fund. While 85% of the 31 valid responses from schools disagreed with continuing the fund, the forum discussed two options for sustainable funding of Oakfield outreach services. Option one was to continue with the school block transfer, and option two was a per-pupil contribution from mainstream schools, alongside a commitment to supporting mainstream inclusion.

Concerns were raised about the potential for a pay-per-use or voluntary model to increase permanent exclusions and the equity of contributions. The forum also discussed the significant predicted overspend on high needs, with over 8,311 EHCPs, a 15% rise since January. Tim Browne confirmed that the deficit could not legally be paid down using transferred funds and that the aim was to slow future deficit growth through early intervention and fewer exclusions/EHCPs.

Ultimately, the forum voted against both options for funding the SEN Investment Fund. Option one received 2 votes in favour, 10 against, and 1 abstention. Option two received 0 votes in favour, 10 against, and 3 abstentions. The Local Authority's recommendation was to note the consultation responses, consider the two options, and agree which option the Forum would recommend to Cabinet. However, no decision was made on which option to recommend.

Other Business

There were no items raised under any other business.

Date of Next Meeting

The next meeting was scheduled for Tuesday 22 September 2026, from 1:30 pm to 3:30 pm. Subsequent meetings were scheduled for Thursday 5 November 2026, Thursday 11 February 2027, and Thursday 24 June 2027.