The deficit on school funding in Southampton is bucking a national trend despite more of the city’s schools ending the financial year in arrears, councillors have been told.

Across the country, local authorities are facing huge overspends on their dedicated schools grant (DSG).

The specific funding from government can only be spent on schools.

Mel Creighton, Southampton City Council’s executive director for enabling services, told members of the authority’s audit committee the deficit had arisen because of the pressure in the special educational needs block.

A government statutory override currently allows authorities to ignore this deficit but this is only a temporary measure which expires in two years.

The city council’s draft statement of accounts for 2023/24 showed the DSG deficit had reduced by £3million to £7million.

“Some of the counties and BCP (Bournemouth, Christchurch and Poole Council) are into the hundreds of millions and their predicted deficit is rising,” Ms Creighton said.

“I think there are only two of us [councils] that are seeing that deficit come down rather than go up, so we are not doing too bad but there is a cut-off date for when we have to have that balance cleared.

“By March 31, 2026, that deficit has to be cleared otherwise it becomes a general fund issue and we have to fund it from the general fund.

“The education team have been working quite hard to bring down costs associated with SEND (special educational needs and disabilities), placement costs etcetera.

“They have been working quite hard which is why you have seen that turnaround from where we were.”

Ms Creighton is also the authority’s section 151 officer, which means she is responsible for the proper conduct of the council’s financial affairs.

The committee heard that there were 14 of Southampton’s 75 schools in deficit.

The council works with these schools to develop a deficit recovery plan to bring them back into balance over one year ideally, but if required, two or three years, Ms Creighton said.

She said there could be a number of reasons for a school finding itself in deficit.

This included the number of pupils on the roll, staffing levels, pay and grant funding not being able to keep up with inflation rates.