A STAY of execution has been granted to beleaguered Somerset Council after the Government ruled it could keep a spending deficit on special needs education (SEND) off its books for another two years.

Demand for SEND teaching has soared in recent years, putting huge pressure on the council’s budget and outpacing Government funding.

Somerset faces a dedicated schools grant (DSG) deficit predicted to exceed £100 million by March, 2026, which would leave it unable to balance its budget and needing to declare itself bankrupt.

Now, the Government has extended an override until 2028 which will allow the council to keep the DSG deficit off its books and ward off the threat of having to issue a ‘section 114’ notice, the local government form of going bankrupt.

Council leader Cllr Bill Revans recently warned MPs local authorities up and down the country would issue ‘section 114’ notices ‘like confetti’ without an extension or overhaul of the override.

The Department for Education (DfE) has now announced an extension and more long-term reforms are expected in the autumn as part of a wider White Paper on schools.

The DfE decision came on the back of a scathing report by Parliament’s Public Accounts Committee, which revealed hundreds of local authorities faced a similar ‘financial cliff edge’ caused by DSG overspends as well as the rise in employers’ National Insurance contributions.

The committee, which includes Tiverton and Minehead MP Rachel Gilmour, estimated local authorities collectively would overspend on SEND by between £2.9 billion and £3.9 billion a year by 2028.

The council welcomed the news but warned it was ‘not even the beginning of a solution’, with months of financial uncertainty still brewing.

Cllr Revans said: “This is not a solution.

“It is not even the beginning of a solution.

“But, it is an avoidance of local government collapsing in half the country next year.

“Without a long-term solution to local government finance, all councils will continue to live with uncertainty.”

A report for councillors on Wednesday (June 25) said Somerset’s overall budget was already overspent by £655,000 this financial year with the gap being funded by taking money from reserves.

The deficit would have been worse but for the Government approving a capitalisation directive, meaning the council could use £36,884,000 from the sale of assets such as land and property to pay for day to day expenditure and reduce the amount it needed to take from reserves.

The council expects to publish a long-awaited DSG deficit management plan by late summer.

Deputy Prime Minister Angela Rayner and Local Government Minister Jim McMahon said in a statement: “This Government recognises the pressures local authorities are facing because of their DSG deficits.

“The spending review confirmed funding to reform the SEND system.

“We will commence a phased transition process which will include working with local authorities to manage their SEND system, including deficits, alongside an extension to the DSG statutory override until the end of 2027-28.

“We will set out more detail at the provisional local government finance settlement.”