Bristol City Council May Need to Repay £27 Million for Schools Bailout

Bristol: Bristol City Council might have to pay back £27 million to the government. This is due to a controversial schools bailout. A judge is looking into whether the council acted unlawfully when they signed the Safety Valve deal. If the judge decides against the council, they may need to return the money.

Mr. Justice Linden is reviewing if the council followed the law last year. The cabinet agreed to the deal, but there are questions about whether they consulted parents first. During a three-day court battle, lawyers debated this issue.

On the last day of the review, a barrister 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 seek to recover the money if the deal is quashed. He noted that no decision has been made yet. If the judge cancels the agreement, the council won’t receive further payments.

The Department for Education had agreed to provide £53 million to the council over several years. This funding was conditional on the council reducing its schools budget deficit. So far, the council has received about £27 million, but the deficit is still expected to reach £52 million by the end of March.

Normally, councils must balance their budgets each year. They can’t carry over deficits. However, due to a national crisis in special educational needs support, the government allowed councils to carry over deficits until March 2026. Bristol’s Safety Valve deal extended this deadline to 2029.

If the deal is canceled, the council will revert to the original deadline. The government might extend the carryover permission or let some councils face bankruptcy.

Mr. Line stated that the next steps are still being considered, and it’s unclear what will happen.

On the first day of the review, lawyers 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 expensive independent special schools.

On the second day, the council’s barrister argued that the Safety Valve deal was just a financial agreement. They claimed the council had consulted schools and parents multiple times. They also warned of a potential financial disaster without the bailout, which could lead to budget cuts in various public services.

The outcome now depends on the judge’s decision. He is expected to announce his ruling in about three weeks.