Local Government Finance
The question
To ask the Secretary of State for Housing, Communities and Local Government, what estimate he has made of the number of local authorities which may need to issue Section 114s if required to recognise historic DSG deficits on their balance sheets, identified by the Office for Budget Responsibility’s Economic Financial Outlook, November 2025 (page 128).
Answered by Alison McGovern
At Autumn Budget 2025, the Office for Budget Responsibility gave an assessment of Dedicated Schools Grant (DSG) deficits which are based on current Special Educational Needs and Disabilities (SEND) policy. This government has clarified that we will set out ambitious plans for reform of SEND provision early in the new year and that funding for SEND will be managed within the government’s overall departmental spending limits from 2028-29. Therefore, we do not expect local authorities to need to fund future SEND costs from general funds, once the DSG Statutory Override ends at the end of 2027-28.
The government does not speculate on the number of local authorities that will need financial support, but we recognise that local authorities are continuing to face significant pressure from the impact of these deficits on their accounts. We will set out further details on our plans for support with historic and accruing deficits the upcoming Local Government Finance Settlement.
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