Members of Devon County Council's ruling cabinet are urging the government to clarify funding for special education after Devon's spending deficit on the service rose to almost £50 million.

Devon County Council's financial report for 2020/21 reveals an underspend of just £35,000 on total revenue, but the special educational needs and disabilities (SEND) budget shortfall increased by £29 million in the year to a current total of £49 million.

The shortfall doesn't currently count towards the main revenue figures. This is because the government has told local authorities to allocate SEND deficits to separate accounts for three years until April 2023.

However, what happens to the current £49 million figure when that arrangement ends is unclear. Councillors are seeking clarity on the matter.

Cabinet member for finance, Councillor Phil Twiss (Conservative, Feniton & Honiton) says the SEND deficit is "climbing at a rather concerning rate."

"We've got to look at whether we're spending that money in the best way, and I think we probably are, because let's not lose sight of the fact that there are real people involved in this that need those services. So it's not just about money."

"What we have learned in the last 12 months is how quickly you can change and adapt, and that's been one of the few positive things to come out of the pandemic."

Cllr Twiss added: "We need assurances from the government that they will help us get that figure down.

"We need to focus on the people and how we can best service their needs. That's something that is continually ongoing at the council and, as we hopefully begin to emerge from the worst of the pandemic, then we can take a long hard look and decide if we're doing the best we possibly can for the service."

The recently appointed cabinet member for children's services and schools, Councillor Andrew Leadbetter (Conservative, Wearside & Topsham), says SEND funding is "one of the biggest pressures" on the council.

"At the moment we have an overspend which is being put into a separate pot, ring-fenced as an overspend, and one of the things moving forward in my new role is how we deal with that overspend.

"One of the other things I've been doing is lobbying the government to give us more money," Cllr Leadbetter said, adding: "The government has many pressures on it, but education is particularly important because children are our future."

Cllr Leadbetter says they are making some changes, such as bringing some outsourced contracts back under direct council control next year and building new special schools such as one at Okehampton that will cater for 80 to 100 pupils.

The leader of the opposition on the county council, Councillor Alan Connett (Lib Dem, Exminster & Haldon) says the government is not funding SEND "fairly or properly" for Devon and many other local authorities.

He said: "I've been flagging this up for the past few years.

"We've been short-changed yet again in Devon while other areas of the country are having money lavished on them.

"This is real money that is being spent and there will be a day of reckoning, so leaving it on the council's credit card – as it were – is okay for now but we need the solution from government about this, not just for Devon but right across the country."

A Department for Education spokesperson said that Devon's high-needs funding for 2021-22 will be £87 million, a 9.8 per-cent per head increase on last year.

"We have announced the biggest increase in school funding in a decade and increased high needs funding for councils to provide services for families and children with special educational needs and disabilities to more than £8 billion this year – an increase of nearly a quarter over two years.

"We are providing targeted support for individual authorities facing particular challenges with their dedicated schools grant deficits, and our SEND Review is also considering how to make sure funding is being spent fairly, efficiently and effectively."

Discussing the £35,000 underspend on the council's £541 million revenue budget, Cllr Twiss described the balanced budget as "remarkable" in light of the pandemic and the extra pressures services have faced

"I was expecting it to be significantly worse than it actually is. We've had so many challenges thrown at us in the past six months that nobody could have possibly imagined."

But opposition leader Cllr Connett questioned why the county's earmarked reserves have increased. During the year they have gone up by just under £17.5 millions to almost £137.5 million, £5.3 million of which has been ring-fenced for public health.

"Reserves are for rainy days. Economically in Devon it's pouring with rain, and we need the council not to be hoarding reserves in its bank, but looking at what it can do to help Devon.

"Roads need fixing, children's services need repairing, we need a 'Made in Devon' scheme that really helps our traders boost their businesses," he said.

The SEND shortfall is one of the reasons highlighted by county treasurer Mary Davis as to why the council faces "considerable financial challenges" in the years ahead. She will present the figures to the authority's ruling cabinet on Wednesday (14 July).

In her report to councillors, Mrs Davis says: "The longer-term financial impact of the pandemic, the spending review, one-year funding settlements from the government together with ongoing pressures in social care and the funding shortfall in special educational needs and disabilities (SEND) mean the authority is facing considerable financial risk in both the short and medium term."

The cabinet will also hear that £134 million was spent on capital projects in the last financial year – £67 million less than budgeted.

Mrs Davis says that the pandemic had an impact on the delivery of the programme across all the county's services and she is recommending that the balance is carried forward into future budgets.