Bristol City Council could have to pay £27 million back to the government for a controversial schools bailout. A judge is considering whether the council acted unlawfully when signing up to the Safety Valve deal, and if he quashes that decision, the money might have to be returned.
Mr Justice Linden will spend the next few weeks considering if the council followed the law early last year when the cabinet agreed to sign up to the deal. During a three-day High Court battle, barristers quarrelled over whether the council should have consulted parents beforehand.
On the last day of the judicial review, on Thursday, January 30, a barrister for the Department for Education warned the council could be left in even more dire straits, if the judge does quash the decision. Without the deal, the council’s schools budget would also face a looming cliff edge.
Alex Line KC said: “Active consideration would be given to recoup the money paid in the Safety Valve agreement. A decision hasn’t been taken yet. If the court quashes the Safety Valve agreement, there won’t be further payments made to them. Renegotiating a quashed Safety Valve agreement is a very unattractive situation for the secretary of state, and local authorities.”
The Department for Education agreed to bail out the council by £53 million, given in stages over several years. The cash was given on the condition the council takes action to eliminate the deficit in its schools budget, reducing the amount it spends on expensive specialist places.
It’s understood the council has received around £27 million so far, as well as a capital grant to build new special school places. Latest figures show the deficit in the schools budget is expected to be £52 million by the end of March, despite the cash that’s already been received.
Councils normally must balance their books every year, and are legally not allowed to carry over budget deficits from one year to the next. But due to the national crisis in special educational needs and disabilities (SEND) support, the government gave councils temporary permission to carry over deficits in their schools budget, known as a “statutory override”, until March 2026.
When Bristol signed up to the Safety Valve, that extended this deadline to balance the books until 2029. The other 37 councils also signed up to the Safety Valve programme were given longer to eliminate their deficits as well. Without the deal, the March 2026 deadline returns. The government could extend the statutory override, or allow several councils to effectively go bust.
Mr Line added: “What will happen next is currently the subject of active consideration. At this stage, it’s not known.”
On the first day of the judicial review, barristers representing Watkins Solicitors, who brought the claim, said the council should have consulted parents about the impact on their children, before signing up to the deal. This is because the deal meant keeping more children in mainstream schools and placing fewer in costly independent special schools.
On the second day, a barrister representing the council said the Safety Valve deal was merely a financial agreement. They added that the council had already consulted multiple times with schools and parents on similar themes within the deal, and warned the council faced a “financial disaster” without the bailout, with the risk of budget cuts across a wide range of public services.
That potential disaster now hinges on the decision of the judge, and if he chooses to quash the deal or not — and if so, then whether the Department for Education would request the money be paid back. Mr Justice Linden’s decision is expected to be made in around three weeks.