The operation of the DSG continues to allow the council to carry forward any DSG deficits and underspends to a ring-fenced reserve. This is separate from the General Fund, which is not permitted to subsidise the account under the regulations.
At the end of 2025/26, the council reported to Cabinet on 10 June 2026 a net deficit balance of £18.519m on its DSG account which includes a High Needs DSG deficit of £18.366m and a Schools Block deficit of £0.153m.
| Schools Block £m | Early Years Block £m | High Needs Block £m | Total £m |
|---|
| Opening balance as at 1 April 2025 | 0.153 | (2.267) | 7.755 | 5.641 |
|---|
| In year adjustment 2025/26 | 0.000 | 2.267 | (2.267) | 0.000 |
|---|
| In-year movement 2025/26 | 0.00 | 0.00 | 12.878 | 12.878 |
|---|
| Closing balance at 31 March 2026 | 0.153 | 0.000 | 18.366 | 18.519 |
|---|
Final adjustments have taken place to produce the statements of accounts, and the updated position that will be reported to Department for Education is below.
| Schools Block £m | Early Years Block £m | High Needs Block £m | Total £m |
|---|
| Opening balance at 1 April 2025 | 0.153 | (2.267) | 7.755 | 5.641 |
|---|
| In year adjustment 2025/26 | 0.000 | 2.267 | (2.267) | 0.000 |
|---|
| In-year movement 2025/26 | 0.00 | 0.00 | 12.480 | 12.480 |
|---|
| Closing balance at 31 March 2026 | 0.153 | 0.000 | 17.968 | 18.121 |
|---|
The General Fund balance shows a net increase in-year of £0.780m, taking the closing position to £21.252m. This is in line with sector guidance that suggests that the general balance should be at least 5% of the net budget requirement and brings the council progressively in line with the general balances held by other London boroughs.
The overall reserves position including earmarked reserves and excluding technical and schools reserves is shown in the table below. Excluding General Fund Balances, the council has set aside net £14.788m into its ring-fenced and non-ringfenced reserves which includes the budgeted £3.500m.