Councils on Brink of Insolvency Amidst Escalating Special Educational Needs Deficits
A stark warning has emerged from local government bodies, indicating that a significant majority of councils are facing a severe financial crisis due to mounting deficits in Special Educational Needs (SEND) provision. Without substantial reforms, the financial stability of these councils is under serious threat, with the potential for widespread insolvency.
Research conducted by the Local Government Association (LGA) reveals that a staggering 79 per cent of councils anticipate being unable to balance their budgets by 2028. This critical juncture marks the end of a statutory override that currently shields SEND overspending from appearing on local authority balance sheets.
While the Government has stated that local authorities will not be expected to bear the full burden of SEND costs after this override expires, the outlook remains grim. An overwhelming 94 per cent of the 87 local authorities surveyed by the LGA indicated that they would likely continue to overspend on SEND provision, even if their existing deficits were cleared in 2028. Alarmingly, nearly half of these authorities predict an acceleration in their rate of SEND budget overspending.
Councillor Amanda Hopgood, chair of the LGA’s children, young people and families committee, expressed grave concerns about the current system. She stated, “Under the current system, the rise in support need has left many councils buckling under the strain. The huge costs in providing support are threatening most councils with insolvency.”
The financial strain is already palpable, with almost all councils (95 per cent) reporting a deficit in their dedicated schools grant for the 2025/26 financial year.
The LGA is actively lobbying the Government to address this crisis. Their key demands include the write-off of existing SEND deficits within the final local government finance settlement. Furthermore, they are urging the Government to ensure that proposed reforms, outlined in the forthcoming Schools White Paper, facilitate greater inclusion of children with SEND in mainstream educational settings.
Paul Whiteman, general secretary of the school leaders’ union NAHT, echoed these sentiments, highlighting that even with the current financial pressures, the support provided often falls short of what is required by schools and families. “It’s urgent that this is addressed in the forthcoming White Paper, both through systemic reform and significant investment,” he emphasised.
The Growing Challenge of Education, Health, and Care Plans (EHCPs)
A significant driver of the escalating costs has been the dramatic increase in the number of Education, Health, and Care Plans (EHCPs). These legally binding documents detail the specific support a young person with SEND is entitled to. The surge in EHCPs has led to spiralling expenses for councils, prompting some to suggest legislative changes to narrow the focus of EHCPs to only the most severe needs. This proposal has, however, raised concerns among many parents of children with SEND.
The number of EHCPs issued has seen a substantial rise, reaching 638,745 as of January 2025, a significant increase from 353,995 in 2019.
The Department for Education has acknowledged the need for change. Education minister Georgia Gould has previously assured that “there will always be a legal right to additional support” for young people with SEND.
Shifting Perspectives: Teacher Support for Reform
Recent polling conducted by Teacher Tapp for the Social Market Foundation offers an interesting insight into the views of educators. Out of 9,000 teachers surveyed, more than half (58 per cent) expressed a preference for reducing the reliance on EHCPs. Instead, they suggested that funds could be better allocated towards earlier intervention programmes and classroom-based support for students.
Government’s Financial Projections and Reform Plans
The Office for Budget Responsibility (OBR) forecasts a substantial £6 billion gap between projected funding and the actual costs of SEND provision in 2028/29. The Government has indicated that this deficit will be absorbed within the broader government budget, rather than being a direct charge on schools.
The Government’s comprehensive plans for SEND reforms are expected to be detailed in the Schools White Paper, anticipated for release in the coming weeks. A spokesperson for the Department for Education stated, “We’re changing the school system and ending the postcode lottery so children with Send get the right support earlier, when and where they need it.”
Key Challenges and Proposed Solutions
The current crisis in SEND provision presents a multifaceted challenge for local authorities. The escalating costs are driven by several factors:
- Increased demand for support: A growing number of children are being identified with SEND, leading to a higher demand for specialist resources and interventions.
- Complexity of needs: The complexity of needs among SEND pupils has also increased, requiring more specialised and often more expensive forms of support.
- The EHCP system: The administrative and legal framework surrounding EHCPs, while intended to ensure adequate provision, has contributed to significant financial burdens for councils.
- Insufficient funding: Despite efforts, current funding levels are widely perceived as inadequate to meet the escalating costs associated with SEND provision.
To address these issues, the LGA and other stakeholders are advocating for a multi-pronged approach:
- Financial Relief:
- Write-off of existing SEND deficits to provide immediate financial breathing room for councils.
- Increased and sustainable funding for SEND provision to meet current and future needs.
- Systemic Reform:
- Reforms to the EHCP process to ensure it is more efficient, targeted, and focused on delivering effective support.
- Greater emphasis on early intervention and preventative measures to identify and address needs before they escalate.
- Facilitating greater inclusion of children with SEND in mainstream schools through enhanced resources, training for staff, and tailored support within the classroom.
- Investment in Resources:
- Significant investment in specialist staff, training, and resources for both mainstream and specialist educational settings.
- Development of integrated pathways for SEND support that effectively link education, health, and social care services.
The forthcoming Schools White Paper is seen as a critical opportunity to outline concrete steps towards resolving this pressing issue and ensuring that all children with SEND receive the support they need to thrive. The financial health of local authorities and the educational future of thousands of children hang in the balance.
