The government extended the Dedicated Schools Grant statutory override by two years to the end of 2027-28, announced on 23 June 2025, and has since gone further: up to 90% of eligible high-needs deficits held at 31 March 2026 are being funded through a High Needs Stability Grant, the same 90% applies to in-year deficits in 2026/27 and 2027/28, and the stated intention is to fully fund the grant from April 2028 1. The override is the accounting permission that lets councils keep deficits on funding for special educational needs and disabilities off their main balance sheet. Councils still owe every pound of it. The shortfall simply does not force a council to declare that it cannot balance its books.
That permission was widely reported as expiring in March 2026, and Room151, a trade title covering public sector finance, reported in March 2025 that up to 43% of councils could face solvency-notice risk if it lapsed 2. It did not lapse. Reporting that 43% figure today would describe a world that did not happen, and it is the precise error this register exists to prevent: a projection published as a forecast, quoted a year later as a fact, long after the condition it depended on was removed.
The money has not vanished with the risk. The Local Government Association puts the cumulative high-needs deficit at about £3.15bn, a figure attributed to the LGA rather than primary-verified here 3. It is growing, and it is now largely funded and masked rather than crystallising into solvency notices. What changes is what a notice means: section 114 notices issued in 2026 and 2027 will reflect general budget failure rather than high-needs deficits, so the signal the count carries is not quite the same signal it carried in 2023.
Two caveats on our own reporting. The extension date and the LGA deficit figure both reached us through secondary summaries this run, and both want a direct government check before they harden into settled cells in this register.
