Appendix 5 CSD - 10.03.2026

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Children's Services is forecasting a year-end overspend of £13.474m against a net budget of £160.449m for 2025/26, an improvement of £1.379m since Q2. p21

The largest financial pressure is placements for children in care, with a forecast overspend of £11.301m, a decrease of £0.224m since Q2. p22

All East Sussex County Council residential children's homes continue to be rated 'Good' or 'Outstanding' by Ofsted. p5

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• p5Residential Homes – Ofsted inspections All East Sussex County Council Residential Children’s Homes continue to be rated ‘Good’ or ‘Outstanding’ by Ofsted. Brodrick House, was inspected in October 2025 and received an ‘Outstanding’ judgement. The judgement found that:
• p21This is due to significant changes taking place in the autumn term, new starters in education/movement of learners and recording of the September guarantee. Final data will be reported at Q4. Revenue Budget Summary Based on current financial modelling, the Q3 predicted outturn for the end of 2025/26 is £173.923m. This is a forecast year-end overspend of £13.474m ( ref xxiii ) . It is a £1.379m improvement since Q2. In 2025/26 CSD has a net budget of £160.449m. There has been £13.301m additional budget given for growth and inflation, however £3.239m has been removed for permanent savings ( ref xvi ) . This equates to a net increase of £10.062m. This year, all £3.239m of savings have been achieved. The main financial pressure continues to come from the statutory demand-driven areas of children we care for, child protection, and Home to School Transport. Not included in the figures reported above is the position of the Dedicated Schools Grant (DSG), which, in accordance with the Schools and Early Years Finance (England) Regulations 2020, is required by local authorities to be shown on their balance sheets. As of 31 March 2025, East Sussex has a cumulative surplus of £2.837m. However, there is an in-year forecast deficit of £26.421m on the DSG, which will result in an overall deficit by the end of 2025/26. £20.131m of the deficit is related to costs of provision for children with Education, Health and Care Plans. The statutory override has been extended until March 2028, at which point the deficit will then be offset against any remaining useable Council reserves. Recent long-term financial modelling indicates a £90.289m cumulative DSG deficit by the end of March 2028, which is unsustainable for the Council. Commissioning and Transformation overspend of £11.722m (ref xx) Commissioning and Transformation is the division in which all children we care for placement expenditure sits.
• p22It has a budget of £70.055m and forecast expenditure of £81.777m at the end of 2025/26, based on current financial modelling. £1.593m savings have been approved to come from the division this year and it is set to achieve them (ref ix) . This is down to the early intervention workstreams Valuing Care and Connected Coaches. Both programmes have aimed to step down children we care for from high-cost placements into placements which meet their needs at a lower cost, or where possible, to reunify children with their families. Children We Care For (Looked After Children) placements For 2025/26 a budget of £64.188m has been set for children we care for placements. £1.000m of this budget is being transferred to pay for the Connected Families teams in Specialist Services, which are focused on prevention activity to support children to remain living with their families. A further £0.100m budget has been transferred to the South-East Regional Care Co-operative (RCC), which has been established to enhance regional commissioning, improve market shaping, and ensure there are sufficient placements to meet the needs of children in care. Children we care for placements remain the largest financial pressure within Children’s Services, with a Q3 forecast overspend of £11.301m for 2025/26. This is a decrease in the overspend of £0.224m since Q2. This improvement has been achieved through a sustained and rigorous focus on commissioning activity, robust and targeted contract negotiations, ensuring that all placement and support packages are appropriately sized to meet children’s needs, and strengthened oversight to hold providers to account for cost, quality and outcomes. An £18.474m overspend is forecast on agency residential and secure placements, with £0.005m underspend forecast on agency foster carers, a £6.358m underspend on agency semi-independent living, and a £0.627m underspend forecast on in-house East Sussex foster carers.