Bristol City Council faces a potential £27 million repayment to the government due to a legal review of a schools bailout agreement.
Bristol: The city council might have to pay back £27 million to the government. This is due to a judge reviewing a schools bailout deal. The judge is looking into whether the council acted unlawfully when they signed the agreement.
Mr. Justice Linden will take a few weeks to decide. He’ll check if the council followed the law last year when they agreed to the deal. During a three-day court battle, lawyers debated if the council should have talked to parents first.
On the last day of the review, a lawyer from the Department for Education warned that the council could face bigger problems if the judge cancels the deal. Without it, the schools budget could be in serious trouble.
Alex Line KC mentioned that the government might try to get back the money from the Safety Valve agreement. He said no decision has been made yet. If the judge cancels the agreement, no more payments will be made to the council.
The government had agreed to help the council with £53 million over several years. This money was given on the condition that the council works to fix its schools budget deficit. They needed to cut spending on expensive special education places.
So far, the council has received about £27 million and a grant to build new special school places. However, the budget deficit is expected to reach £52 million by the end of March, despite the funds received.
Normally, councils must balance their budgets each year. They can’t carry over deficits. But due to a national crisis in special educational needs, the government allowed councils to carry over deficits until March 2026.
When Bristol joined the Safety Valve program, they got an extension until 2029. Other councils in the program also received more time to fix their deficits. Without the deal, the March 2026 deadline would return, and the government might let some councils go bankrupt.
Mr. Line added that the next steps are still being considered, and it’s unclear what will happen.
On the first day of the review, lawyers for Watkins Solicitors argued that the council should have consulted parents about the deal’s impact on their children. The deal aimed to keep more kids in mainstream schools and reduce placements in costly independent special schools.
On the second day, a lawyer for the council said the Safety Valve deal was just a financial agreement. They claimed the council had consulted schools and parents multiple times. They warned that without the bailout, the council could face severe budget cuts across many public services.
The outcome now depends on the judge’s decision. If he cancels the deal, the Department for Education might ask for the money back. Mr. Justice Linden’s decision is expected in about three weeks.
