The Children and Families Overview and Scrutiny Panel met on Friday 20 March 2026 to discuss the significant deficit in the Dedicated Schools Grant (DSG) and to review performance and budget monitoring for children's services. The panel also considered suggestions for its future work programme.

Dedicated Schools Grant High Needs Deficit Management Plan

The panel received an update on the substantial deficit within Worcestershire's Dedicated Schools Grant (DSG), which is projected to reach £194.1 million by March 2026. This deficit is primarily within the High Needs Block, which funds provision for children with special educational needs and disabilities (SEND). The report highlighted that this deficit has been steadily increasing since 2020/21, with a significant acceleration in recent years. National figures indicate a cumulative deficit of £3.2 billion across local authorities by March 2025, with projections suggesting it could reach £14 billion by March 2028 without government intervention.

Worcestershire County Council has been involved in the Delivering Better Value in SEND programme and is implementing a range of measures to address the deficit. These include embedding structural transformations within the SEND service, controlling commissioning through an Alternative Provision Dynamic Purchasing System, and strengthening multi-agency panels for SEND placements and children who cannot attend school. The council is also focusing on workforce training to reduce suspensions and exclusions, and has agreed to transfer 0.5% of the DSG Schools block allocation to the High Needs Block.

The government has announced a High Needs Stability Grant, which will cover 90% of historic DSG deficits up to 2025/26, subject to the approval of a SEND local reform plan. This plan, which Worcestershire is developing, is crucial for securing this funding. The report detailed various actions requiring additional resource, such as enhanced commissioning capacity and expansion of the in-house BSL and Braille specialist TA workforce. It also outlined actions requiring further policy decisions, including future Schools Block transfers and the formalisation of Post-16 pathways.

The financial modelling presented indicated that without intervention, the cumulative DSG deficit could reach £437 million by the end of financial year 2027/28. However, with the proposed Deficit Management Plan and anticipated government support, the deficit to be met by council reserves could be reduced to £27.9 million by 2028/29. The report stressed the sensitivity of these figures to various variables, including future government funding and the number of Education, Health and Care Plans (EHCPs).

Performance and In-Year Budget Monitoring

The panel was presented with performance data for Quarter 3 (October to December 2025) and in-year budget information for Period 9. The performance dashboard covered key indicators for children and families services.

Ofsted Performance: The data showed that for Worcestershire schools inspected up to December 2025, 82% of primary schools, 80% of secondary schools, and 100% of special schools were judged as Good or Outstanding in terms of the quality of education. Overall, 82% of all Worcestershire schools inspected were rated as Good or Outstanding for the quality of education, compared to 50% nationally. Ofsted's inspection framework had recently changed, with headline grades removed in favour of four sub-categories: quality of education, behaviour and attitudes, personal development, and leadership and management.

School Attendance: Overall attendance rates for Worcestershire schools were reported at 93.7% for Q3, an improvement on the previous year. Severe absence and persistent absence rates remained positively low. Attendance rates for Children Looked After, children on child protection plans, and those receiving child in need support were lower, but recent appointments to enhance the Multi-Agency Child Protection Team and Virtual School responsibilities were expected to support these children. Attendance rates for pupils with EHCPs and those receiving SEN support were also reported, with persistent and severe absence rates for these cohorts lower than the previous year.

Children Missing Education (CME): Worcestershire's CME rate of 0.5% was in line with the national average. The report noted an increase in CME numbers during Q3, partly due to increased reporting from schools and independent schools. Education Engagement Officers had successfully supported 310 children back into educational provision during this period. While Worcestershire's CME rate was largely in line with national data, there was a marginally higher rate for Years 9-11, which was being monitored.

Part-Time Timetables: The data indicated a comparatively small cohort of children accessing part-time timetables, with the majority being used as a short-term measure for re-engagement or reintegration. Longer-term part-time timetables were being monitored by EHCP coordinators or the Absence Monitoring Team/CCAS panel.

Elective Home Education (EHE): The total number of students enrolled in EHE was 1,401, a consistent picture. The number of children from Gypsy, Roma, and Traveller communities receiving EHE had increased. There were 109 active cases of EHE involving children with EHCPs. Families cited various reasons for choosing EHE, but a significant proportion of submissions lacked specific rationale.

Exclusions: Worcestershire had seen a positive trend in reducing permanent exclusions over the past three years, deviating from the national picture of an increase. However, there was a spike in exclusions by the end of Q3 2025/26, with 54 permanent exclusions compared to 44 at the same point in the previous year. There was also an increase in exclusions involving students with EHCPs. The Inclusion Team was working closely with SEND colleagues and educational providers to prevent exclusions.

Not in Education, Employment or Training (NEET): NEET figures had been falling pre-Covid but rose significantly during and after the pandemic due to various factors, including reduced provision, mental health issues, and young people not being socially or emotionally ready for college. Current data suggested this increase was continuing. The WCC NEET team and Employment and Skills team were collaborating to understand these trends and implement a NEET Reduction and Prevention Strategy.

Children Looked After (CLA): The number of looked after children peaked at 1,066 in November 2025. The number of children becoming looked after for a second period in 12 months remained consistent. The number of children looked after under Section 20 of the Children Act 1989 remained lower than statistical neighbours or the England average, reflecting a commitment to secure legal permanence. There was a success in health assessments for CLA, with a rapidly improving picture. The percentage of looked after children engaged in Education, Employment and Training (EET) aged 16-17 years showed accelerated improvement. There was a continued rise in children living in children's homes, reflecting more complex situations and a lack of sufficiency in fostering. The number of children placed 20+ miles from home had also increased.

Child Protection: There was a continued increase in the number of children made subject to child protection plans, with neglect being the primary reason. Rates of repeat child protection plans remained steady. The complexity and risk were also highlighted in child protection strategy discussion outcomes, with an increase in those needing a child protection enquiry.

Children in Need (CIN): In Q3, there was an increase in private law cases handled by the safeguarding team. The Supporting Families First numbers had fluctuated, with an increase in edge of care families and complexity, but successful outcomes were being achieved in keeping families together. The number of incidents of children going missing from home increased, with analysis identifying specific children who went missing multiple times.

Workforce and Quality of Practice: The number of frontline social workers employed remained stable, above 90%, and supervision continued at 89%.

Financial Position: The overall corporate position for Q3 2025/26 indicated a breakeven position after using £17.2 million of reserves. However, costs were continuing to increase at a faster rate than income, with increased forecast overspends in demand-led areas of Adult Social Care and Children's Social Care. The Children's Services revenue forecast showed a net overspend of £10.1 million, an increase from the Q1 forecast. This was primarily due to a £6.5 million overspend on placements and a £1.4 million overspend on staffing across social care. The All Age Disability service was forecasting an increased overspend of £2.4 million due to increased costs for agency Educational Psychologists and hard-to-fill vacancies.

The number of placements had increased by 2% compared to December 2024, with external placements also increasing. The average unit costs for new and repurchased placements were significantly higher. The number of children in Independent Sector Residential care had increased, leading to significant additional costs. Similarly, the number of children in Independent Sector Fostering had increased, with associated cost increases.

The Home to School Transport service had a net forecast underspend of £6.1 million.

The Dedicated Schools Grant (DSG) High Needs budget forecast an overspend of £95.7 million, with a brought forward deficit of £98.2 million. The accumulated deficit was projected to be £194.1 million by March 2026. The statutory override allowing the deficit to be held as a negative unusable reserve had been extended until March 2028. The High Needs Stability Grant would cover 90% of the deficit accrued up to March 2026.

Refresh of the Scrutiny Work Programme 2026/27

The panel was asked to consider suggestions for its 2026/27 Work Programme. Members were invited to suggest topics for future scrutiny, which would be prioritised using agreed feasibility criteria. The remit of the Children and Families Overview and Scrutiny Panel covers Children's Social Care and Families, Public Health relating to Families, and Education and Skills. The panel noted the dates of future meetings and the process for approving the final work programme. The current 2025/26 Work Programme was attached for reference, outlining topics such as the High Needs DSG Deficit Plan, Performance and In-Year Budget Monitoring, and the Refresh of the Scrutiny Work Programme itself. Potential future items included updates on SEND, Elective Home Education, the use of AI in EHCP production, and CAMHS access.